Oral
Answers to
Questions

BUSINESS, ENERGY AND INDUSTRIAL STRATEGY

The Secretary of State was asked—

Marine Energy

Albert Owen: What discussions he has had with the Welsh Government on the place of marine energy in the industrial strategy; and if he will make a statement.

Greg Clark: My ministerial colleagues and I have regular discussions with our counterparts in the Welsh Government on all aspects of the industrial strategy. Last week, my officials were in Cardiff to discuss with the Welsh Government the proposed Swansea bay tidal lagoon.

Albert Owen: At the heart of the industrial strategy is spreading prosperity across the whole of the United Kingdom, and working with devolved Administrations in our nations and regions will help to achieve that. The Welsh Government are working with practical developers—Minesto, an international company, and local company Morlais—to develop marine energy in my part of the world. The Secretary of State mentioned the Swansea bay tidal lagoon. Will he now make a decision and work with the Welsh Government and with developers so that we can roll that out, maximise our potential, and spread prosperity in this part of the United Kingdom?

Greg Clark: I share the hon. Gentleman’s enthusiasm for green energy, as he knows, and I am proud of our achievements. Since 2010, we have quadrupled the proportion of our electricity that comes from renewable sources. However, as the hon. Gentleman understands from being on the Select Committee, we also have a responsibility to minimise the impact on consumers’ bills. The Swansea proposal was very much more expensive—more than twice as expensive—as the Hinkley nuclear power station, for example. As I said, though, we are in discussions with our colleagues in the Welsh Government. I do not want to close the door on something if it is possible to find a way to justify it as being affordable to consumers.

Jessica Morden: I, too, say to the Minister that making a decision on the Swansea bay tidal lagoon is important for Wales as a whole. There is huge potential for future lagoons around Newport following the Swansea pathfinder. It is really important that we do not pass up these opportunities.

Greg Clark: I take the hon. Lady’s point. I think that everyone recognises these issues. In fact, the First Minister wrote to me yesterday and acknowledged the
“genuine challenges in…considering a proposal involving untried technology with high capital costs and significant uncertainties.”
That is why the best way to do this is to explore all the possibilities and to recognise the constraints. That is what I have committed to with colleagues in the Welsh Government.

Smart Meters

Lee Rowley: What assessment he has made of the level of consumer satisfaction with smart meters.

Bill Grant: What assessment his Department has made of the effect of smart meters on consumer energy behaviour.

Richard Harrington: Government research on consumer satisfaction published in August last year shows that satisfaction with smart meters is high. Eighty per cent. of consumers are satisfied with their smart meters and 80% would recommend them to friends and family. Smart Energy GB found that nearly 90% of people with a smart meter made energy savings and changed their behavioural patterns.

Lee Rowley: I thank the Minister for his response. It is good to hear that so many people are reaping the benefits from smart meters. No system is ever perfect, however, and that is the case for a small number of customers such as a club in my constituency, Killamarsh juniors athletics club, which is now on its third smart meter and is getting really unhelpful responses from its electricity provider. Can he provide any advice to the club in my constituency?

Richard Harrington: My hon. Friend has made a point about the Killamarsh juniors club in his constituency. I would be very happy to meet him on that specifically. However, I have not found this generally to be the case. The roll-out of smart meters is a very important national modernisation programme that brings major benefits to consumers generally and to his constituents specifically.

Bill Grant: Smart meters are good for consumers and suppliers alike, but the roll-out relies on there being a good mobile phone signal for them to be effective, and in many parts of rural Scotland that is simply not the case. Can the Minister reassure me that he is working across the Government and with relevant stakeholders to ensure that residents in rural areas benefit from smart meters?

Richard Harrington: I agree entirely with my hon. Friend. We are working on that, and the Arqiva radio solution provides communications services for the north region. That covers Scotland, and it is contracted to cover nearly 100% of premises by the end of 2020.

Steve McCabe: Does the Minister accept that his statistics are based on surveys that are carried out about 10 weeks after installation? My own survey found that 54% of constituents would  currently refuse a smart meter, 97% want to see the costs of the programme shown on their bills, and 74% said that receiving one had not yet made any difference to the size of their bills. Will he also take those findings into account?

Richard Harrington: The hon. Gentleman knows me well enough to know that I am very interested in anything he has to say. He contributed a lot to the passage of the Smart Meters Bill in the House of Commons. I would be very interested to receive those statistics, but we do receive them from quite a few different places, and I do not just quote one sample.

John Cryer: I am sure the Minister is speaking in good faith, but I have come across constituents who find that bills are not reducing, but increasing. Has he had discussions with the utility companies about keeping an eye on this and making sure that the effect of smart meters is to reduce costs for constituents, many of whom are poor, not raise them?

Richard Harrington: I am very surprised to hear what the hon. Gentleman says. As he said—I am grateful for it—I am talking in good faith; I know he is too. I would be pleased to hear of those examples, but I cannot quite understand why bills would go up, because nearly 90% of people with smart meters say that it is changing their energy patterns and that bills are going down.

Stephen Kerr: Can the Minister update us on where we are with the roll-out of SMETS 2 smart meters?

Richard Harrington: As my hon. Friend, who also contributed a lot to the passage of the Bill, knows, SMETS 2 is the newer type of meter which at the moment is in its trial phase. As the months go on, SMETS 1 meters will be converted through software that is being developed by the Data Communications Company, and all new meters will be SMETS 2.

Alan Brown: How satisfied are consumers when they realise that a smart meter becomes a dumb meter when they switch suppliers? Can he put an accurate timeline on the roll-out of SMETS 2 meters?

Richard Harrington: As I explained, the software that is being developed now and will be in place shortly after the summer will ensure that that does not happen. The comparatively small number of SMETS 1 meters that do not operate as smart meters when suppliers change will suddenly become compliant, and they will all be able to speak to one another electronically, which is what we all want.

Carbon Reduction Targets

Anna McMorrin: What assessment he has made of the UK’s ability to meet its carbon reduction targets.

Teresa Pearce: What assessment he has made of the UK’s ability to meet its carbon reduction targets.

Claire Perry: We should all be proud of the progress the UK has made in meeting its carbon reduction targets. The current statistics show that we have met our first budget, are on track to exceed our second and third budgets and are 97% and 95% of where we need to be to meet our fourth and fifth budgets—[Interruption.] I hear groaning, but I think those are decent numbers, given that we are 10 and 15 years away from achieving those budgets.

Anna McMorrin: The lack of commitment, focus and ambition from this Tory Government mean that we are set to miss our legally binding carbon targets. Three easy wins could be to repeal the ban on onshore wind, prioritise energy efficiency measures and zero-carbon homes and commit to the Swansea bay tidal lagoon. When are this Government going to get their act together, demonstrate their commitment to future generations and get on with it?

Claire Perry: I think the hon. Lady perhaps wrote that before hearing my answer. Let me share two facts with her. First, Britain has led the world in decarbonising our economy while growing it at the same time, not delivering carbon cuts with recessions, as other parties would like. Secondly, there are two countries in the world considered to be doing enough to meet even a 2° C target, and those are China and the UK. We have set out what has been described as the most ambitious set of policies and proposals ever seen from a Government in the clean growth strategy. We are bringing that forward, and it would be nice to feel we had a cross-party consensus on doing something that is so vital for both this country’s future and the future of the world.

Teresa Pearce: I was interested to hear the Minister say that we are on target for three carbon budgets but will miss the fourth. The Committee on Climate Change said that the fourth carbon budget will not be met unless policies are supplemented by “more challenging measures”. She spoke about ambition. Can she tell us what those challenging measures will be?

Claire Perry: As I answered before, the calculations for the fourth and fifth carbon budgets—which, I repeat, end in 10 and 15 years’ time and which we are 97% and 95% of the way to meeting—are based on an analysis of only 30% of the policies and proposals in the clean growth strategy. [Interruption.] My right hon. Friend the Secretary of State says he thinks that that is quite good; I agree.
We are bringing forward further work on those policies and proposals and also spending an unprecedented amount on research and development in this space—more than £2.5 billion over this Parliament. I am extremely confident that we will meet our budgets, with our ambitious policy, the ingenuity of British businesses and the science base, the strong campaigning and the structure of the Climate Change Act 2008—the Act that we were the first country in the world to pass.

Antoinette Sandbach: Does the Minister agree that improving home energy efficiency measures would help us to meet our carbon budgets?

Claire Perry: My hon. Friend led an excellent debate on this in Westminster Hall, where we had a very strong outbreak of cross-party consensus. I entirely agree, and  that is why we have set our home efficiency targets at band C for 2035. We are keen to do that in a cost-effective way, and I will shortly be bringing forward the consultation on ECO—the energy company obligation—and how to target it at fuel-poor households. In addition, we need to create a route to market for some of our best British technology to solve that problem.

John Stevenson: Nuclear power will clearly be central to us reaching our carbon targets. Is the Minister confident that enough progress is being made to see the construction of nuclear plants in Anglesey and Cumbria?

Claire Perry: As the hon. Gentleman knows, making these long-term decisions and creating costs for consumers over decades—whether in tidal lagoons or in nuclear—are matters that we have to take extremely seriously. We have to reduce the carbon emissions of our power supply, cut costs for consumers and create innovation that we can export around the world, and all of those considerations are being taken into account.

Drew Hendry: To meet carbon reduction targets, the Government will need to support, among other technology, offshore wind projects. In Scottish waters, Dounreay Tri, Kincardine and Forthwind are working to deliver first generation projects with an immediate value of £200 million for jobs and the supply chain, yet due to factors outwith their control, they will struggle to hit the UK Government’s October deadline. Will the Minister meet me to discuss how we might support these projects in making their contribution to carbon reduction?

Claire Perry: We have worked very hard on the wind industry in Scotland—the hon. Gentleman and I both welcome the recent announcement about remote island wind, which is a really positive step forward—but the challenge is that the phasing out of the renewables obligations was set over four years ago. People have been fully aware of them, and we are currently not intending to extend the length of the grace periods. However, as he knows, I am always happy to try to build cross-party consensus on this vital agenda for this country.

Alan Whitehead: I am sure it is absolutely not the intention of the Minister to mislead the House in any way, but her statements about our being 96% of our way towards meeting our fourth and fifth carbon budgets need to be put in the context of the fact that we are committed to reducing CO2 emissions by 225 million tonnes, but the Government proposals will reduce the amount by only 116 million tonnes, which is only just over half the requirement between the fourth and fifth carbon budgets. What are the Minister’s proposals under the clean growth plan to make sure that we reduce the amount by the outstanding 109 million tonnes?

Claire Perry: The hon. Gentleman is a clever scientific fellow, and he knows that those numbers refer to the baseline numbers of 1990. I would be very happy to sit down with him and go line by line through the carbon budgets and the policy proposals. Again, he and I both need to be absolutely clear that regardless—[Interruption.]  There is an awful lot of shouting from the hon. Member for Blyth Valley (Mr Campbell), who wants to bring back coal. Regardless of what this and future Governments do, those budgets must be fit for purpose, and we have to be absolutely clear and transparent about how we are going to meet them, and that is exactly what the clean growth strategy has done.

Electric Vehicle Charge Points

Mark Pawsey: What recent steps he has taken to improve electric vehicle charge point infrastructure.

Greg Clark: Britain is building one of the best charge point networks in the world, and our £400 million charging infrastructure investment fund, announced at the Budget, will see thousands more charge points installed across the UK.

Mark Pawsey: Yesterday, the Business, Energy and Industrial Strategy Committee visited the London Electric Vehicle Company in my constituency. The Secretary of State will remember opening it a year ago, and it is great that we are now seeing electric taxis on the streets of London. We also went to the Electric Vehicle Experience Centre in Milton Keynes, where we heard concerns about the fact that the lack of compatibility between chargers and connectors is in danger of putting people off buying an electric car. What will the Secretary of State do to encourage the industry to adopt a standard?

Greg Clark: I am delighted that the Committee went to see the electric taxi company. The opening, at which my hon. Friend accompanied me, was a fantastic event. Having such compatibility is a very important matter. The recently introduced Alternative Fuels Infrastructure Regulations 2017 set minimum standards for publicly accessible charge points. In addition, the Automated and Electric Vehicles Bill, which is currently before Parliament, will give the Government new powers to regulate these technical standards.

Mark Tami: Many supply companies are worried that if there is a high uptake, which I think we would all support, the infrastructure will not be there to support it. It is just not true that electric vehicles do not use a great deal of power, so there are concerns about strain on the system as a whole.

Greg Clark: I am grateful to the hon. Gentleman for those comments. Our access to the network is one of the best in the world, especially for fast chargers. He is absolutely right that electric vehicles can contribute to the electricity grid’s resilience, because their batteries can store electricity generated by renewables for a time when it is needed, which is very much part of the smart systems plan.

Michael Fabricant: Batteries, of course, are one of the constraints that people consider before buying electric cars, because of their limited range. Does my right hon. Friend therefore welcome the initiative of the Mayor of the West Midlands, along with the Government, for introducing a battery research centre in the west midlands?

Greg Clark: Not a Question Time goes by without me welcoming an initiative from the Mayor of the West Midlands. We have worked very closely with the Mayor, and with the automotive industry, to ensure that we are investing at the cutting edge of research into battery technology, precisely so that we can build the cars of the future.

Thangam Debbonaire: What comfort can the Secretary of State give the people of Bristol, who wish to see the number of electric charging points massively increased?

Greg Clark: I am delighted that there is such enthusiasm in Bristol. The hon. Lady will be aware that the funding for charging infrastructure is available especially for city-centre authorities that can put it into public car parks.

Oil and Gas Industry

Andrew Bowie: What progress has been made on a sector deal for the oil and gas industry.

Richard Harrington: The Government remain committed to supporting the industry and building on the £2.3 billion package announced in recent Budgets. My right hon. Friend the Minister for Energy and Clean Growth greatly enjoyed her recent visit to Aberdeen—as did I, when I visited—when the industry presented its initial proposals for a deal. My right hon. Friend is meeting the sector deal champion, Trevor Garlick, tomorrow.

Andrew Bowie: I thank my hon. Friend for that answer. The oil and gas industry based in the north-east of Scotland has contributed over £330 billion to the economy, supports over 330,000 jobs across the United Kingdom and has a supply chain worth nearly £30 billion. With an estimated 20 million barrels of oil still to get out of the North sea, the industry has huge potential to drive this country’s growth, but of course there is still uncertainty, so I know that the Minister will welcome the response—

John Bercow: Order. I am sorry to interrupt the hon. Gentleman, but we need a single-sentence question, not a preamble.

Andrew Bowie: Will the Minister pledge to work continually with the industry to develop and deliver the sector deal?

Richard Harrington: Yes.

John Bercow: Thank you.

Jim Shannon: What discussions has the Minister had with the Treasury about the impact of Her Majesty’s Revenue and Customs’ new end-use procedure changes on the gas and oil industry?

Richard Harrington: I will give a very succinct answer, as you have requested, Mr Speaker. I do not know, but I will happily meet the hon. Gentleman to discuss it.

Stephen Crabb: What consideration is my hon. Friend giving to the downstream sector? Our remaining oil refineries are important national assets and major centres of employment, and they could benefit from clear, long-term thinking.

Richard Harrington: As my right hon. Friend will be aware, the whole sector is important to us, and specifically the supply chain. I have met various players involved, and it is of critical importance to us.

Drew Hendry: The UK Government have so far failed to announce a sector deal for oil and gas, and there was no mention of one in their industrial strategy. There is a need for a sector deal approach to the industry. The Scottish Government have been calling for such action. Will the Minister finally rectify this glaring omission and commit that vital support for the industry and the jobs and investment it relies on?

Richard Harrington: The hon. Gentleman should be aware that this is a priority for us. We are working very hard with the sector to come up with a sector deal, and I expect those talks to come to fruition very soon.

Electric and Autonomous Vehicles

Ranil Jayawardena: What steps he is taking to support the development of electric and autonomous vehicles.

Greg Clark: The automotive sector deal will ensure that the UK continues to reap the benefits from leading the transition to zero-emission and autonomous vehicles. Last month that drew in £33 million of investment into the UK-based connected and autonomous vehicle programmes, with participation from across the industry.

Ranil Jayawardena: Jaguar Land Rover recently developed the I-Pace, its first all-electric performance SUV, and, as my hon. Friend the Member for Rugby (Mark Pawsey) mentioned, the London Electric Vehicle Company has developed the world’s first purpose-built electric taxi. Will my right hon. Friend join me in congratulating those great British manufacturers on the world-leading role they are playing in the sector?

Greg Clark: I certainly will. The Jaguar and the London taxi are iconic images, and to see them leading the way into the future is a matter of great delight. I congratulate both companies on choosing to manufacture those vehicles in the UK.

Jim Cunningham: What is the Secretary of State doing to help development in the transition from diesel to electric vehicles? In particular, how is he helping with infrastructure?

Greg Clark: We are working very closely with the industry to ensure that as it develops the new technologies of the future, it is able to plan a smooth transition to a world in which all vehicles will be compatible with our climate objectives.

Steve Double: All the new electric vehicles will need batteries, of which lithium is an essential element. Recent discoveries of large deposits of lithium in Cornwall open up the possibility of the UK securing a domestic supply for this vital element. What support can the Secretary of State give to this exciting new emerging sector?

Greg Clark: Through our industrial strategy, we have highlighted the potential for new developments in battery storage. If Cornwall can supply the lithium to power that new industry then I am delighted to hear it. I will discuss the possibilities further with my hon. Friend.

Peter Kyle: At yesterday’s Select Committee visit, mentioned by the hon. Member for Rugby (Mark Pawsey), it became very apparent that the market for electric vehicles is maturing at a much faster rate than many people realise. Is it possible that the ambition of the sector itself is outstripping the ambition of the Government, and should the 2040 target not be brought forward, perhaps even by a decade?

Greg Clark: When it comes to the new generation of automotive technology, the ambition of this Government is not outstripped by anyone. We are working very closely—hand in glove—with the industry, through the Automotive Council, to make sure that we are the best placed in the world not only to research the new technologies, but to manufacture them in this country.

Automotive Sector

Justin Madders: What financial support his Department makes available for manufacturers in the automotive sector.

Greg Clark: The Government’s long-term partnership with the automotive industry is an exemplar of our industrial strategy. Only a fortnight ago, I went to Derbyshire to welcome Toyota’s decision to build the new Auris in Burnaston, helping to secure 3,000 jobs between Burnaston and Deeside in north Wales.

Justin Madders: I am sure that, while welcoming that investment, the Secretary of State will have been alarmed by the comments made by the chief executive of the PSA Group, which owns Vauxhall in my constituency, about the lack of certainty, with Brexit affecting investment decisions. Will the Secretary of State meet the PSA Group and me to give us confidence in terms of investment in the future of that plant?

Greg Clark: I regularly meet with chief executives of car companies, including Mr Tavares. It is very clear that we are determined, as the Prime Minister set out in her Mansion House speech, to make sure that this very important integrated supply chain is able to continue to operate. It is worth bearing in mind that since my team have been in the Department every single major new model decision has gone our way. I am determined to keep up that advocacy.

Gill Furniss: The automotive sector is crucial to UK industry. It employs 814,000 people and we are all proud of British car manufacturers, including the iconic Rolls-Royce  and Jaguar. In recent weeks, however, President Trump has revealed an appetite for a trade war that began with the announcement of steel tariffs and now includes threats to put tariffs on EU cars, which could hit our industry hard. Will the Secretary of State tell this House what he is doing to avoid a trade war with the US? Should such tariffs come into play, what will he do to protect our steel and automotive sector?

Greg Clark: I am sure the hon. Lady was in her place yesterday when the Trade Secretary gave a very comprehensive statement. There was some welcome for the cross-party approach that went into defending the international system of free trade. It does no one any good if we have tariffs in place that impede trade. Her endorsement of the approach being taken by the Trade Secretary would be welcome.

Carillion

Gerald Jones: Whether he is taking steps to safeguard the employment of people who were working under private sector Carillion contracts at the time of that company’s liquidation.

Alex Chalk: What steps he has taken to support and engage with businesses affected by the liquidation of Carillion.

Andrew Griffiths: The official receiver and special manager are working to ensure an orderly transition by facilitating the transfer of contracts. As of 12 March, 8,521 jobs have been safeguarded and 1,536 people have been made redundant, sadly, through the liquidation. My right hon. Friend the Business Secretary has set up a taskforce, bringing together trade associations, bankers and representatives of Government to ensure that we support the Carillion supply chain. The taskforce has delivered a range of supportive measures, including more than £900 million of support from UK lenders.

Gerald Jones: Let me seek some further clarification. If there is any doubt that TUPE applies, can the Government confirm that they will instruct the official receiver to transfer employees on private sector contracts as if TUPE applied? Will the Government also ensure that trade union recognition is transferred with those staff?

Andrew Griffiths: I thank the hon. Gentleman for that question and refer him to the recent Westminster Hall debate, when we discussed at some length the legal responsibilities in relation to TUPE, which do not apply in many cases during a liquidation. Transferring employers may well decide to offer terms to transferring employees that recognise existing employment rights, terms and conditions. The Government are focused on ensuring that transferred employees are no worse off, and the official receiver is doing all he can to facilitate this wherever possible.

Alex Chalk: The Carillion collapse has exposed what can only be described as market abuse by lead contractors, with subcontractors in Cheltenham suffering as a result  of the failure to adhere to best practice schemes such as the prompt payment code. What steps are the Government taking to ensure compliance with the schemes and more generally to stamp out market abuse?

Andrew Griffiths: My hon. Friend, who has met me on a number of occasions to defend the interests of businesses in his constituency, will know that the Government had two priorities: to protect the provision of vital public services and to do what we could to protect jobs in Carillion and jobs in the supply chain. We are clear that we must learn the lessons from the collapse of Carillion. This could be a catalyst for change for the good. We are concerned to ensure that we do all we can to learn the lessons on procurement, and we also want to do more to ensure that the supply chain is promptly paid and that small businesses are paid speedily. Looking at the prompt payment code is an important part of that.

Rachel Reeves: Following on from the question from the hon. Member for Cheltenham (Alex Chalk), when Carillion went bankrupt, many of the subcontractors had not been paid for 120 days. The money coming to Carillion was from the Government, so what are the Government doing to ensure that when they give contracts to big businesses, those businesses pay their subcontractors on time? Small businesses are the lifeblood of our economy and they have been destroyed by the collapse of Carillion.

Andrew Griffiths: I thank the hon. Lady for that question and particularly for the work that her Select Committee is doing in getting to the bottom of exactly what happened in Carillion. That is very important work. The Government are clear that with public sector contracts we pay in 30 days, and we expect tier 1 contractors to ensure that they pay their supply chain in 30 days too. We are determined to take action to ensure that this happens, and we are looking at what we can do to make sure not only that small businesses in the public sector supply chain get paid within 30 days, but that we do more to support private sector suppliers as well.

Henry Smith: What support has been given to British nationals working abroad who were with Carillion?

Andrew Griffiths: The main priority for this Government has been to protect jobs here in the UK and the continuation of public sector contracts and services. The special manager, of course, has a responsibility to wind up the business to get the best value for creditors, but he is responsible for dealing with businesses overseas.

Eleanor Smith: For the Carillion workers who were not transferred under TUPE, what was the degradation of their terms?

Andrew Griffiths: I have met the hon. Lady several times, and I know that she is working hard to ensure that her constituents employed by Carillion get all the protections possible. The Secretary of State has had conversations with the special manager to ensure that wherever possible when contracts are transferred employees get like conditions so that they are no worse off. As she  will understand, this is a very complex and complicated business, and I do not at the moment have the specific statistics she requests.

Self-employed People

Andrea Jenkyns: What steps he is taking to support self-employed people.

Andrew Griffiths: We want people to be self-employed when it is the right thing for them, which is why the Government have introduced new measures to ensure they are even better supported. These include improved support for embarking on self-employed careers, encouraging pension saving and supporting people to pay the right tax. From 6 April 2016, we have also given self-employed people the ability to build their entitlement to the new state pension at the same rate as employed people.

Andrea Jenkyns: Morley is lucky to have a thriving high street, which matters to me as an ex-retailer. During the recent cold weather, Apollo Fisheries in Morley handed out free food to cold residents. What are the Government doing to support our businesses on the high street, and will the Minister take this opportunity to congratulate Apollo Fisheries on its fine example of Yorkshire hospitality at its best?

Andrew Griffiths: I think the House will recognise that I am no stranger to a fish supper, and I would like to join my hon. Friend in congratulating Apollo Fisheries on the community spirit it showed. It clearly demonstrates that businesses contribute not just to the economy but to our society. The future high streets forum provides joint business and Government leadership to enable our high streets and town centres to adapt and compete in the face of changing consumer and social trends, but we want to go further, so last week I announced the establishment of the Retail Sector Council, which will bring together leaders in retail to help to develop policies and support for the vital retail sector.

Angela Eagle: We all want self-employment to grow, but we also want to crack down on apparent self-employment, where people are forced to become self-employed by exploitative employers who then save on national insurance contributions while putting all the risk of that employment on often vulnerable individuals. What are the Government doing about that?

Andrew Griffiths: I am sure the hon. Lady will be delighted to know that the Government are taking forward the proposals set out by Matthew Taylor. We recognise that employment status—whether workers are employed or self-employed—is key to their getting not only the payments but the protections they deserve. That is why we have embarked on a full consultation with the intention of clarifying the status of workers, giving them extra protections and ensuring that if it looks like work and feels like work, it is work and they are paid properly.

Rebecca Long-Bailey: The Government’s response to the Taylor review did virtually nothing to tackle the challenges and insecurity that self-employed people face. Equally poor was the Government’s response to the treatment of gig workers.
“Don has died and they should be making changes”.
Those were the words of DPD gig worker Don Lane’s widow, Ruth. With this in mind and with Matthew Taylor himself last week rating the Government’s response to the Taylor review a shocking four out of 10, what score would the Minister give himself?

Andrew Griffiths: Seven weeks in, I think I would give myself 10 out of 10. The hon. Lady quotes Matthew Taylor. He has said quite clearly that this is a complex and complicated matter. He wants us to get the definition of status right, because the rights of thousands of gig workers depend on it. That is why in the passage the hon. lady quotes he also said that when we have finished our consultation, if we deliver what we have promised he would give us seven or eight. I want to go further; I want it to be 10.

Rebecca Long-Bailey: Ten out of 10 indeed! The Chancellor today might attempt to laud employment figures as positive news, but he will fail to state that over 3 million people are in insecure work, and, according to a recent report by the Centre for Labour and Social Studies, over a third of all workers do not even earn enough to live. There are also real fears, despite the Prime Minister’s assurances, that the quality of work will worsen still, with reports that the Foreign Secretary and other Ministers are pushing for major employment law deregulation. Will the Minister confirm whether his Department is carrying out any work looking at the deregulation of certain employment rights?

Andrew Griffiths: The hon. Lady must have missed the intention behind what the Government were doing with the Matthew Taylor report. Not only are we committed to continuing the existing employment rights and protections, but we are going further and faster than anyone else—further and faster than our European colleagues—to give gig workers and others in vulnerable conditions, such as agency workers, greater protections than ever before. We are not just talking about it; we are protecting those workers.

Small Business Sector

Stephen Hammond: What steps he is taking to support growth in the small business sector.

John Bercow: I call the Minister.

Andrew Griffiths: Apologies, Mr Speaker. I was congratulating myself too much!
The Government-owned British Business Bank provides £4 billion to support more than 60,000 UK small and medium-sized enterprises. We plan to unlock more than £20 billion of investment in innovative and high-potential businesses, including a new £2.5 billion investment fund with the British Business Bank. The Small Business Commissioner helps with payment issues, dispute resolution, and the sourcing of advice throughout the UK. Through  the industrial strategy, we are continuing to invest in 38 growth hubs across England, as well as the business support helpline.

Stephen Hammond: Of course I join in the congratulations to the Minister, but he will know that one of the crucial requirements for the success of the small business sector is access to and understanding of finance, and there is considerable evidence that there is currently a knowledge gap in the market. What are the Government doing to address that?

Andrew Griffiths: My hon. Friend has hit the nail on the head. We are concerned by reports that businesses, particularly small businesses, are reticent about coming forward to access finance that could help them to invigorate and grow. That is why the British Business Bank produces “The business finance guide”, in partnership with the Institute of Chartered Accountants in England and Wales and industry bodies. The guide explains the different sources of finance that are available to smaller businesses, and is also published online. The British Business Bank will launch a new digital platform in the spring to raise awareness even further.

Tim Farron: Small businesses in Cumbria, particularly those involved in farming and tourism, were integral to the Lake district’s gaining world heritage site status last summer, a designation that could lead to a massive increase in the number of visitors to what is already Britain’s second-biggest visitor destination. Will the Government back those small businesses with the infrastructure investment that they need in order to cope and to grow? Will they, for instance, electrify the Lakes Line?

Andrew Griffiths: I am delighted to support the small businesses to which the hon. Gentleman has referred. He will be pleased to know that we are boosting infrastructure, including digital infrastructure, with more than £1 billion of public investment, including £176 million for 5G and £200 million for local areas to encourage the roll-out of full-fibre networks. I should also be delighted to meet him to discuss what more we can do for lakeside businesses.

Bim Afolami: Hitchin and Harpenden, which are both small towns, have a thriving independent retail sector, but in recent months they have reported that things are getting harder for them. Will the Minister reassure me that the Government are doing everything they can to help independent small retailers in thriving market towns?

Andrew Griffiths: As the retail Minister, I recognise the real challenges faced by our high streets and, in particular, by independent businesses. In his spring Budget statement, the Chancellor announced a package of measures for business rate relief, including a £1,000 discount for pubs with rateable values below £100,000, £300 million for local authorities to fund discretionary rate relief, and a cap on rate increases, which means that businesses that lose their small business rate relief will not see their bills increase.

Bill Esterson: The Minister should stop being quite so complacent. Carillion was a signatory to the prompt payment code; Interserve still is. Carillion suppliers were paid on terms of 120 days,  while Interserve subcontractors say that they are being absolutely hammered by late payment. Yesterday the Federation of Small Businesses again highlighted the damage done to growth by late payment. When will Ministers support smaller firms in the public sector supply chain, and enforce the prompt payment code?

Andrew Griffiths: We are certainly not complacent, which was why we set up the trade body group to assess the impact of Carillion. The hon. Gentleman will be delighted to know that yesterday I spoke to Phil King, who runs the prompt payment code, and I will be meeting him later this week to discuss how we can tighten up the code and give it real teeth. We are determined to help small businesses.

Local Enterprise Partnerships

Stephen McPartland: What plans he has for the future of local enterprise partnerships.

Sam Gyimah: We remain firmly committed to local enterprise partnerships. As announced in the industrial strategy, we are currently reviewing the roles and responsibilities of LEPs so that they are able to play an important role in developing local industrial strategies and driving growth across the country as we prepare to leave the European Union.

Stephen McPartland: Hertfordshire LEP has been a disaster for Stevenage people. Does the Minister agree that it is shameful that growth deal round 1 money is being used to build new council offices and sell off public sector land for developers to build luxury flats, with less than 10% being affordable homes?

Sam Gyimah: Some £15 million of growth deal round 1 money has already been invested in Stevenage, and that has helped to leverage a commitment of £350 million of private investment into the town. My hon. Friend raises an issue of concern, and I urge him to speak to the Secretary of State for Housing, Communities and Local Government to resolve it.

Barry Sheerman: May I invite the ministerial team to step out of its bubble by coming to Yorkshire and talking to our local enterprise partnerships to respond to their pessimism that while London and the south might survive post Brexit, the midlands, the north and the regions will be in bitterly disappointed territory?

Sam Gyimah: The hon. Gentleman talks manufacturing down, but manufacturing is doing incredibly well in the north of England. He will also be aware that “place” is one of the five pillars of our industrial strategy, and we are determined to deliver across the country.

Euratom

Layla Moran: What assessment he has made of the effect of the UK leaving Euratom on (a) the economy and (b) scientific research in Oxfordshire.

Richard Harrington: I know that the hon. Lady has a keen interest in this subject, and we have met to discuss the impact on many of her constituents working at the Culham Centre for Fusion Energy. As she knows, our assessment was detailed in the “Nuclear Sector Report” at the end of December last year, and in an impact assessment for the Nuclear Safeguards Bill, which was first published on 18 December. We continue to engage with stakeholders, and the hon. Lady knows that my door is always open if she wishes to discuss this matter further.

Layla Moran: I thank the Minister for his response. We know that the Government are seeking a close association with Euratom, but with just 109 days until Austria takes up the presidency, Oxfordshire needs clarity now to plan for the future. Can the Government categorically say they are seeking an associate agreement, and can they guarantee that they will kick-start the process before 1 July?

Richard Harrington: I can confirm that, as the hon. Lady knows, we are seeking the closest possible association with Euratom. We are working very hard to achieve that objective.

John Howell: Does the Minister agree that at the recent meeting of the all-party group on nuclear fusion, which I chair, the Government’s attitude to expanding their collaboration in nuclear activity was greatly evident?

Richard Harrington: I thank my hon. Friend for that question. He also has a keen constituency interest in this, and I am very keen to represent the interests of his constituents.

Topical Questions

Mark Menzies: If he will make a statement on his departmental responsibilities.

Greg Clark: Since our last questions, Toyota has announced, as I said a few moments ago, that it would build its new model in Derbyshire, with most of the engines coming from the Deeside factory in north Wales. We also published our response to the Taylor review on modern employment practices. A million more vulnerable consumers will be protected by the extension of the Ofgem safeguard tariff cap and, as Members know, the Domestic Gas and Electricity (Tariff Cap) Bill has been introduced into Parliament. Yesterday, as part of our industrial strategy, we announced a major £300 million research programme into technologies to serve the ageing population and to ensure that we can benefit from this encouraging global trend.

Mark Menzies: What engagement is the Secretary of State having with a Canadian company called Brookfield, the likely buyer of Springfields nuclear fuels in my constituency, which manufactures nuclear fuel for the UK and provides over 1,200 well-paid jobs?

Greg Clark: My hon. Friend is a champion of this sector. The Under-Secretary, my hon. Friend the Member for Watford (Richard Harrington), has met the vice-   president of Brookfield and expressed our continuing support for Springfields to have a future in providing fuel for plants in this country and overseas.

Chi Onwurah: GKN was forged in our country’s first industrial revolution. It built the tanks used in the D-day landings, and its innovative battery technology will power our future economy. The Government’s industrial strategy identifies batteries as a key technology and manufacturing as a priority sector, yet the Secretary of State has nothing to say about the hostile takeover of that great firm. Why is it that all too often, as with Arm and Unilever, his industrial strategy seems to leave great British success stories less great or less British?

Greg Clark: I would have thought that the hon. Lady would have informed herself as to the responsibility of Ministers under the Enterprise Act 2002. That Act, which was passed under the previous Labour Government, states that Ministers can intervene only in mergers that raise public interest concerns on the grounds of national security, financial stability or media plurality. She should know that the Government’s corporate governance reforms have ensured that GKN had longer to prepare its defence, preventing the kind of smash and grab raid that Cadbury’s was subjected to under the previous Government, and that provision has been made for legally binding undertakings to be given in takeover bids. Those are intended to be used, and I would be surprised and disappointed if any bidder did not make their intentions clear, extensive and legally binding.

Sheryll Murray: Can my hon. Friend assure me that protected status for Cornish produce such as the Cornish pasty will not be compromised post-Brexit?

Andrew Griffiths: It is said that I am no stranger to the fish supper, and I also have knowledge of the Cornish pasty and, indeed, Cornish clotted cream. All those products will achieve UK geographical indications and will continue to be protected in the UK after our EU exit. As negotiations are ongoing, I cannot give my hon. Friend a cast-iron assurance right now that UK products will remain protected in the EU after exit, but I can categorically state that that is the Government’s clear objective.

Graham Jones: I am grateful to Carl Webb, my Communication Workers Union regional political officer, for bringing to my attention the BT Sport call centre in my constituency, which is paying the minimum wage to agency workers beyond 12 weeks using the Swedish derogation. The Taylor report talked about getting rid of the Swedish derogation, so when are the Government going to act to protect some of our lowest paid workers?

Andrew Griffiths: I assure the hon. Gentleman that we are acting right now; a consultation is under way with regard to the Swedish derogation. Firms and businesses should be in no doubt that this Government expect everyone to be paid either the national minimum wage or the national living wage. That is why we have doubled the amount of enforcement and protected the pay of 98,000 workers. We are absolutely committed to everybody getting paid the national minimum wage.

Douglas Ross: Late and non-payment of retention payments in the construction industry is affecting small firms in Moray and across the UK. When will Ministers deal with that issue?

Richard Harrington: The Government are determined to improve payment practices, and we understand that retentions have caused problems for contractors in the supply chain. We consulted on the contractual practice of cash retention and we are now considering the responses to assess the extent of the issues and to determine what further intervention is required.

Stuart McDonald: Does the Minister agree that there is overwhelming evidence that migrant workers, including EU nationals, make a hugely positive contribution to business, the economy and our public finances, and that they do not undermine wages?

Greg Clark: I think that we all recognise the extremely positive contribution made by workers from the EU, whether in business or in our public services, and I endorse that.

Damien Moore: According to the tidal energy industry leader Tidal Lagoon Power, Southport is considered to be one of the best locations in the United Kingdom for a tidal lagoon. Will my right hon. Friend therefore meet me to discuss the possibility of bringing tidal energy to Southport?

Claire Perry: My hon. Friend is, as ever, assiduous in promoting the interests of his constituency, and I would be delighted to meet him. I should point out that the lagoon project in his constituency is currently not part of the proposal being put forward by the company promoting other tidal projects.

Jeff Smith: The Government raised business rates on rooftop solar schemes by up to 800% last year, and it now appears that on-site battery storage is likely to go the same way. Given that gas combined heat and power has been exempted from business rates, should not the Government do the same for solar and battery storage to support clean energy?

Claire Perry: Our solar capacity has increased by more than 30% in the past two years, so we clearly are bringing forward such schemes. The hon. Gentleman will know that we are looking closely at ways of reducing some of the disincentives, particularly around on-site storage, but I am happy to meet him to discuss things further.

Peter Heaton-Jones: Does the Minister agree that the south-west is a great region in which to do business? Will he join me in recognising the work of the Barnstaple and District chamber of commerce, which I met on Friday, in promoting North Devon as, without doubt, the region’s economic powerhouse?

Andrew Griffiths: The south-west is indeed a great region in which to do business. Chambers of commerce including Barnstaple’s, which has been serving its community since 1911, have a valuable role to play in supporting local businesses and ensuring that their voice is heard. That is why I have met chambers of commerce 11 times in the seven weeks in which I have been the Minister for small business.

Chris Law: Solar power is the most popular source of clean energy and one of the cheapest, so why has it been excluded from clean power auctions for the past three years? Why oh why does it continue to be excluded, putting the industry at a clear competitive disadvantage?

Claire Perry: We continue to look at ways of bringing forward all forms of renewable energy. Indeed, up to 30% of energy generation in this country now comes from renewables. We have not yet taken decisions about future contract for difference allocation rounds, but we intend to do so.

Kevin Hollinrake: The banking scandals at RBS destroyed thousands of businesses, but the owners of those businesses have no means of seeking justice or recompense. Will the Minister support the proposal of the all-party group on fair business banking and finance for redress through an independent tribunal system?

Andrew Griffiths: I pay tribute to the work of the all-party group, of which my hon. Friend is a vice-chair. I met it just last week to explore the options. I share his aim that small businesses should have an accessible and impartial forum through which to seek redress when things go wrong. There is work to be done on how that would be paid for and on whether legislation would be required, but I look forward to seeing the research and to working with him.

Richard Burden: The 220 people who work at GKN Aerospace in my constituency produce windshields for military and commercial aircraft, so is that not another indication that the hostile takeover bid raises national security implications? The Secretary of State has the power to intervene under the Enterprise Act 2002.

Greg Clark: As we have met to discuss this matter, the hon. Gentleman knows that I must ensure that I do not prejudice any assessment. I set out to the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) the constraints under which I have to operate.

Paul Masterton: Last October’s “Made Smarter” review set out how manufacturing businesses in East Renfrewshire and across the UK can be transformed through the adoption of industrial digital technology. How will the Government support “Made Smarter” now that it has been announced as a deal in development in the industrial strategy?

Richard Harrington: I have met Juergen Maier, the chief executive of Siemens UK, to discuss that. At a recent dinner, my right hon. Friend the Secretary of State announced a “Made Smarter” commission and  asked Sir Mark Walport to work with Juergen on the development of an industrial strategy challenge for the digitisation of our manufacturing industry.

Gregory Campbell: The number of electric vehicles on our roads is likely to increase significantly over the next few years. What work is being done to ensure that charging points are more frequently powered by renewable sources over that period?

Greg Clark: The hon. Gentleman makes an excellent point. Part of our industrial strategy is about bringing together the energy and automotive sectors, so that one reinforces the other. That is the Faraday challenge, which is attracting so much attention in both industries.

Philip Dunne: Given our close defence and trading relationship with the United States, will the Minister reassure the House that he is making efforts to secure an exemption for UK-produced steel and aluminium products from next week’s imposition of tariffs?

Richard Harrington: I was in Brussels yesterday to meet other European Union Ministers, trade union leaders and representatives of employers to ensure that we do exactly that.

Rachel Reeves: The Business, Energy and Industrial Strategy Committee has heard powerful evidence on why the Government should call in the Melrose bid for GKN on national security grounds, and the Secretary of State for Defence has written to the Business Secretary about the matter. Will the Business Secretary use his powers, before it is too late, to protect this great British engineering giant?

Greg Clark: I will look very carefully at the report of the Committee and that will be one of the pieces of evidence that I will seriously consider.

Richard Graham: The Secretary of State has said that his door is still open to discussions about the benefits of green energy, so will he commit today to seeing Charles Hendry—the author of the Hendry review, which is still awaiting a response from the Government 14 months on—me, as chair of the all-party group on marine energy and tidal lagoons, and representatives of Tidal Lagoon Power and TidalStream?

Claire Perry: It is always a pleasure to respond to my hon. Friend, who is an assiduous campaigner for this form of energy. We continue to commit to supporting our marine energy industry. I refer him to the answer that my right hon. Friend the Secretary of State gave at the start of questions. We continue to exchange information with the Welsh Government, and we have to understand what is on offer. We want to reach the right decision on behalf of low-carbon technologies, but also British bill payers and taxpayers.

David Hanson: The county in which I live, Flintshire, has only two electric charging points. Given the earlier exchanges, can the Secretary of State set targets for charging points in rural areas as well as urban ones?

Greg Clark: The right hon. Gentleman makes an excellent point. It is true that the charging network needs to extend right across the country if people are to have the confidence that they will be able to recharge their vehicle, and we have the rural aspect very much in mind.

Anna Soubry: According to the press, the Secretary of State gave a presentation to a Sub-Committee of the Cabinet about the automotive sector and how important it is that we do not have a hard Brexit. That seems to have persuaded members of the Cabinet who had thought that a hard Brexit might be a good idea that it would, in fact, be a very bad idea  for British business, notably the automotive sector. On that basis, will the Secretary of State make that presentation available to all right hon. and hon. Members?

Greg Clark: It would be wrong of me to disclose conversations that took place in Cabinet—my right hon. Friend understands the requirements of collective responsibility—but it is no secret to anyone in this House that I regard the fact that the success of the automotive sector depends on integrated supply chains as good evidence of what type of trade agreement is needed. That was highlighted in the excellent speech made by my right hon. Friend the Prime Minister at the Mansion House.

SPRING STATEMENT

Philip Hammond: I am pleased to introduce to the House the first spring statement. The UK was the only major economy to make hundreds of tax and spending changes twice a year, and major international organisations and UK professional bodies alike have been pressing for change. In 2016, I took the decision to move to a single fiscal event in the autumn, giving greater certainty to families and businesses ahead of the new financial year and allowing more time for stakeholder and parliamentary engagement on potential fiscal changes.
Today’s statement will update the House on the economic and fiscal position, report progress on announcements made at the two Budgets last year and launch further consultations ahead of Budget 2018, as I set out today in my written ministerial statement. I will not be producing a Red Book today, but of course I cannot speak for the right hon. Member for Hayes and Harlington (John McDonnell).
I am pleased to report today to the House on a UK economy that has grown in every year since 2010—an economy that, under Conservative leadership, now has a manufacturing sector enjoying its longest unbroken run of growth for 50 years, that has added 3 million jobs and seen every single region of the UK with higher employment and lower unemployment than in 2010, that has seen the wages of the lowest-paid up by almost 7% above inflation since April 2015 and that has seen income inequality lower than at any time under the last Labour Government. That is solid progress towards building an economy that works for everyone.
So I reject the Labour party’s doom and gloom about the state of the nation. Every Wednesday, we have to listen to the Leader of the Opposition relentlessly talking Britain down, and every year since 2010 we have had to listen to the right hon. Member for Hayes and Harlington predict a recession—none of which has actually happened. So if there are any Eeyores in the Chamber, they are on the Opposition Benches; I, meanwhile, am at my most positively Tigger-like today, as I contemplate a country that faces the future with unique strengths: our language is the global language of business; our legal system is the jurisdiction of choice for commerce; we host the world’s most global city and its international finance and professional services capital; our companies are in the vanguard of the technological revolution, while our world-class universities are delivering the breakthrough discoveries and inventions that are powering it; British culture and talent reaches huge audiences across the globe; and our tech sector is attracting skills and capital from the four corners of the earth, with a new tech business being founded somewhere in the UK every hour, producing world-class products, including apps such as TransferWise, Citymapper and Matt Hancock.
Today, the Office for Budget Responsibility delivers its second report for the fiscal year 2017-18, and I thank Robert Chote and his team for their work. It forecasts more jobs, rising real wages, declining inflation, a falling deficit and a shrinking debt. The economy grew by 1.7% in 2017, compared with the 1.5% forecast at the Budget, and the OBR has revised up its forecast for 2018 from 1.4% to 1.5%. Forecast growth is then unchanged  at 1.3% in 2019 and 2020, before picking up to 1.4% in 2021 and 1.5% in 2022. That is the OBR’s forecast, but forecasts are there to be beaten; as a nation, we did it in 2017, and we should make it our business to do it again.
Our remarkable jobs story is set to continue, with the OBR forecasting more jobs in every year of this Parliament and over 500,000 more people enjoying the security of a regular pay packet by 2022. I am pleased to report that the OBR expects inflation, which is currently above target at 3%, to fall back to target over the next 12 months, meaning that real wage growth is expected to be positive from first quarter of 2018-19 and to increase steadily thereafter.
I reported in the autumn that borrowing was due to fall in every year of the forecast and debt was to fall as a share of GDP from 2018-19. The OBR confirms that today, and further revises down debt and borrowing in every year. Borrowing is now forecast to be £45.2 billion this year. That is £4.7 billion lower than forecast in November and £108 billion lower than in 2010, which, coincidentally, is almost exactly the total cost of the additional spending pledges made by the Labour party since the general election in June last year; it has taken them just nine months to work up a plan to squander the fruits of eight years’ hard work by the British people.
As a percentage of GDP, borrowing is forecast to be 2.2% in 2017-18, falling to 1.8% in 2018-19, 1.6% in 2019-20, then 1.3%, 1.1% and finally 0.9% in 2022-23, meaning that in 2018-19 we will run a small current surplus, borrowing only for capital investment. And we are forecast to meet our cyclically adjusted borrowing target in 2020-21 with £15.4 billion of headroom to spare, which is broadly as forecast at the Budget. The more favourable outlook for borrowing means the debt forecast is nearly 1% lower than in November, peaking at 85.6% of GDP in 2017-18 and then falling to 85.5% in 2018-19, then 85.1%, 82.1%, 78.3%, and finally 77.9% in 2022-23.
That is the first sustained fall in debt in 17 years; a turning point in this nation’s recovery from the financial crisis of a decade ago; light at the end of the tunnel; another step on the road to rebuilding the public finances that were decimated by the Labour party. And it is one that Labour would again place at risk, because under Labour’s policies, our debt would not fall over the next five years; it would rise by more than £350 billion to more than 100% of our GDP, undermining our recovery, threatening investment in British jobs, burdening the next generation and wasting billions and billions of pounds more on debt interest. There is indeed light at the end of the tunnel, but we have to make absolutely sure that it is not the shadow Chancellor’s train hurtling out of control in the other direction towards Labour’s next economic train wreck.
In autumn 2016, I changed the fiscal rules to give us more flexibility to adopt a balanced approach to repairing the public finances. We are reducing debt not for some ideological reason, but to secure our economy against future shocks, because we in the Conservative party are not so naive as to think that we have abolished the economic cycle, because we want to see taxpayers’ money funding our schools and hospitals, not wasted on debt interest, and because we want to give the next generation a fair chance. But I do not agree with those who argue that every available penny must be used to  reduce the deficit; nor do I agree with the fiscal fantasists opposite who argue that every penny should be spent immediately. We will continue to deliver a balanced approach. We are balancing debt reduction against the need for investment in Britain’s future, support to hard-working families through lower taxes and our commitment to our public services.
Judge me by my record. [Interruption.] We will see whether the Opposition have done their homework; they might be surprised. Since the 2016 autumn statement, I have committed to £60 billion of new spending, shared between long-term investment in Britain’s future and support for our public services, with almost £9 billion extra for our NHS and our social care system. There is £4 billion going into the NHS in 2018-19 alone and, as I promised at the autumn Budget, more to come if, as I hope, management and unions reach an agreement on a pay modernisation deal for our nation’s nurses and “Agenda for Change” staff, who have worked tirelessly since the autumn, in very challenging circumstances, to provide the NHS care that we all value so highly. There is £2.2 billion more for education and skills and £31 billion to fund infrastructure, research and development and housing, through the national productivity investment fund. That takes public investment in our schools, hospitals and infrastructure in this Parliament to its highest sustained level in 40 years.
At the same time, we have cut taxes for 31 million working people by raising the personal allowance again, in line with our manifesto commitment. We have taken more than 4 million people out of tax altogether since 2010. We are freezing fuel duty for an eighth successive year, taking the saving for a typical car driver to £850, compared with Labour’s plans, and raising the national living wage to £7.83 from next month, giving the lowest paid in our society a well-deserved pay rise of more than £2,000 for a full-time worker since 2015.
Since becoming Chancellor, I have provided an extra £11 billion of funding for 2018-19 to help with short-term public spending pressures and to invest in Britain’s future. In the longer term, I can confirm that, at this year’s Budget, I will set an overall path for public spending for 2020 and beyond, with a detailed spending review to take place in 2019 to allocate funding between Departments. That is how responsible people budget: first, they work out what they can afford; then they decide what their priorities are; and then they allocate between them. If, in the autumn, the public finances continue to reflect the improvements that today’s report hints at, then, in accordance with our balanced approach and using the flexibility provided by the fiscal rules, I would have capacity to enable further increases in public spending and investment in the years ahead, while continuing to drive value for money to ensure that not a single penny of precious taxpayers’ money is wasted. We are taking a balanced approach—getting our debt down, supporting our public services, investing in our nation’s future and keeping taxes low—as we build a Britain fit for the future and an economy that works for everyone.
There is much still to do. Since autumn 2016, we have set out our plan to back the enterprise and ambition of British business and the hard work of the British people. It is a plan to unleash our creators and innovators, our inventors and discoverers, to embrace the new technologies of the future and to deliver the skills that we will need to benefit from them. It is a plan to tackle our long-standing  productivity challenges and to say more loudly than ever that our economy will remain open and outward looking, confident of competing with the best in the world.
We choose to champion those who create the jobs and the wealth on which our prosperity and our public services both depend, not to demonise them. The shadow Chancellor is open about his ideological desire to undermine the market economy, which has driven an unparalleled increase in our living standards over the past 50 years. We on the Conservative Benches reject his approach outright. The market economy embraces talent, creates opportunity and provides jobs for millions and the tax revenues that underpin our public services, so we will go on supporting British businesses. We are reducing business rates by more than £10 billion, and we committed at autumn Budget 2017 to move to triennial revaluations from 2022. Today, I am pleased to announce that we will bring forward the next business rates revaluation to 2021 and move to triennial reviews from that date. We will also launch a call for evidence to understand how best we can help the UK’s least productive businesses to learn from, and to catch up with, the most productive, and another on how we can eliminate the continuing scourge of late payments—a key ask from small business. We are the party of small business and the champions of the entrepreneur.
Since the Budget, we have made substantial progress in our negotiations with the European Union to deliver a Brexit that supports British jobs, businesses and prosperity. I look forward—[Interruption.] I do not know what the hon. Member for Wansbeck (Ian Lavery) does, but I look forward to another important step forward at the European Council next week. We will continue to prepare for all eventualities. Today, my right hon. Friend the Chief Secretary is publishing the departmental allocations of over £1.5 billion of Brexit preparation funding for 2018-19, which I announced at the autumn Budget.
Our modern industrial strategy sets out our plan to keep Britain at the forefront of new technologies with the biggest increase in public research and development spending for four decades. Much of this new technology depends on high-speed broadband, and today I can make the first allocations of the £190 million local full-fibre challenge fund announced at the autumn Budget and confirm £25 million for the first 5G testbeds.
As our economy changes, we must ensure that people have the skills they need to seize the opportunities ahead, so we have committed over £500 million a year to T-levels—the most ambitious post-16 reforms in 70 years. From next month, £50 million will be available to help employers to prepare for the roll-out of T-level work placements. Last week the Education Secretary and I chaired the first meeting of the national retraining partnership between the Government, the TUC and the Confederation of British Industry. I can reassure the House that there was no beer and no sandwiches—not even a canapé—but there was a clear and shared commitment to training in order to prepare the British people for a better future ahead. Next month our £29 million construction skills fund will open for bids to fund up to 20 construction skills villages around the country.
The Government are committed to delivering 3 million apprenticeship starts by 2020, with the support of business through the apprenticeship levy, but we recognise the  challenges that the new system presents to some small businesses looking to employ an apprentice, so I can announce today that my right hon. Friend the Education Secretary will release up to £80 million of funding to support those small businesses in engaging an apprentice. We publish a consultation on improving the way in which the tax system supports self-funded training by employees and the self-employed. Because we currently understand more about the economic payback from investing in our infrastructure than we do about investing in our people, I have asked the Office for National Statistics to work with us on developing a more sophisticated measure of human capital so that future investment can be better targeted.
We are undertaking the largest road building programme since the 1970s. As Transport Secretary in 2011, I gave the green light to fund the new bridge across the River Mersey, and I was delighted to see it open late last year. The largest infrastructure project in Europe, Crossrail, is due to open in just nine months’ time. We are making progress on our plans to deliver the Cambridge-Milton Keynes-Oxford corridor. We are devolving powers and budgets to elected mayors across the northern powerhouse and midlands engine. We are in negotiations for city deals with Stirling and Clackmannanshire, Tay cities, borderlands, north Wales, mid Wales and Belfast. Today we invite proposals from cities across England for the £840 million fund that I announced at the Budget to deliver on their local transport priorities as part of our plans to spread growth and opportunity to all parts of this United Kingdom.
At the heart of our plan for building an economy that works for everyone is our commitment to tackle the challenges in our housing market, with an investment programme of £44 billion to raise housing supply to 300,000 a year by the mid-2020s. Today I can update the House. The Housing Minister is working currently with 44 authorities who have bid into the £4.1 billion housing infrastructure fund to unlock homes in areas of high demand. We are concluding housing deals with ambitious authorities that have agreed to deliver above their local housing need. I can announce today that we have just agreed a deal with the West Midlands Combined Authority, which has committed to deliver 215,000 homes by 2030-31, facilitated by a £100 million grant from the land remediation fund. My hon. Friend the Housing Minister will make further announcements over the next few days on the housing infrastructure fund.
We will more than double the size of the housing growth partnership with Lloyds Banking Group to £220 million, providing additional finance for small builders. London will receive an additional £1.7 billion to deliver a further 26,000 affordable homes, including homes for social rent, taking total affordable housing delivery in London to over 116,000 by the end of 2021-22.
My right hon. Friend the Member for West Dorset (Sir Oliver Letwin) has outlined his initial findings on the gap between planning permissions granted and housing completions in a letter that I have placed in the Library. I look forward to his full report at the Budget. I am delighted to inform the House that an estimated 60,000 first-time buyers have already benefited from  the stamp duty relief that I announced at the autumn Budget. I remind the House that the Labour party voted against this.
In the autumn we published a paper on taxing large digital businesses in the global economy. Today we follow up with a publication that explores potential solutions. I look forward to discussing this issue with G20 Finance Ministers in Buenos Aires at the weekend. We also publish a call for evidence on how online platforms can help their users to pay the right amount of tax, and we will consult on a new VAT collection mechanism for online sales to ensure that the VAT that consumers pay actually reaches the Treasury. We will also call for evidence on how to encourage cashless and digital payments while ensuring that cash remains available for those who need it.
The Government are determined that our generation should leave the natural environment in a better state than we found it and improve the quality of the air that we breathe, so we will publish a call for evidence on whether the use of non-agricultural red diesel tax relief contributes to poor air quality in urban areas. Following our successful intervention to incentivise clean taxis, we will help the Great British white van driver to go green with a consultation on reduced vehicle excise duty rates for the cleanest vans.
We will follow up on the vital issue of plastic littering and the threat to our oceans with a call for evidence to support us in delivering on our vow to tackle this complex issue. It will look at the whole supply chain for single-use plastics, and at alternative materials, reusable options and recycling opportunities. It will look at how the tax system can help to drive the technological progress and behavioural change that we need—as a way not of raising revenue, but of changing behaviour and encouraging innovation. We will commit to investing to develop new, greener products and processes, funded from the revenues raised. As a down payment, we will award £20 million now from existing departmental budgets to businesses and universities in order to stimulate new thinking and rapid solutions in this area during the call for evidence.
We are delivering on our plan with a balanced approach, restoring the public finances, investing in our economy and our public services, raising productivity through our modern industrial strategy, building the homes our people need, tackling the environmental challenges that threaten our future, embracing technological change and seizing the opportunities ahead as we build our vision of a country that works for everyone and an economy where prosperity and opportunity are in reach of all, wherever they live and whatever their gender, colour, creed or background, where talent and hard work alone determine success, as a beacon of enterprise and innovation and an outward-looking, free-trading nation, confident that our best days lie ahead of us, a force for good in the world and a country that we can all be proud to pass on to our children. I commend this statement to the House.

John Martin McDonnell: I thank the Chancellor for providing me with early sight of his statement, but I have to say that his complacency today is astounding. We face in every public service a  crisis on a scale that we have never seen before. Has he not listened to the doctors, nurses, teachers, police officers, carers and even his own councillors? They are telling him that they cannot wait for the next Budget. They are telling him to act now. For eight years they have been ignored by this Government, and today they have been ignored again.
The Chancellor has proclaimed today that there is light at the end of the tunnel. This shows just how cut off from the real world he is. Last year, growth in our economy was among the lowest in the G7—the slowest since 2012. The OBR has just predicted that we will scrape along the bottom for future years. Wages are lower now, in real terms, than they were in 2010—and they are still falling. According to the Resolution Foundation, the changes to benefits due to come in next month will leave 11 million families worse off—and, as always, the harshest cuts fall on disabled people.
The gap in productivity between this country and the rest of the G7 is almost the widest for a generation. UK industry is 20% to 30% less productive than in other major economies—and why? In part, the reason is that investment by the Government, in real terms, is nearly £18 billion below its 2010 level. This is a Government who cut research and development funding by £1 billion in real terms. Business investment stagnated in the last quarter of 2017. Despite all the promises, the Government continue to fail to address the regional imbalances in investment. London will, again, receive five times more transport investment than Yorkshire and Humberside and the north.
How dare this Government speak on climate change? This is a Government who singlehandedly destroyed the solar industry, with 12,000 jobs lost as a result of subsidy cuts. The Chancellor talks about the fourth industrial revolution, but Britain has the lowest rate of industrial robot use in the OECD. The Government have put £75 million into their artificial intelligence programme—less than a tenth of what the US is spending.

Simon Hoare: Talking of artificial intelligence!

John Martin McDonnell: The Tory bully boys can shout all they want. They can make—[Interruption.]

John Bercow: Order. There will be a full opportunity for people to contribute, but the right hon. Gentleman must be heard.

John Martin McDonnell: The Tories can shout all they want and they can make their snide remarks, but people out there know about the crisis in our communities.
The Chancellor has made great play this week of reaching a turning point in reducing the deficit and debt. That is a bit rich coming from a party that has put £700 billion on the national debt over the past eight years. It is worth remembering that this is a party that promised us that the deficit would be eliminated completely by 2015 and then 2016. Bizarrely, his predecessor, now ensconced in the Evening Standard—or Black Rock, the Washington Speakers Bureau, or whatever number of jobs he now has—has been tweeting about achieving, three years late, a deficit target that he actually abandoned himself.
The reality is that the Chancellor and his predecessor have not tackled the deficit: they have shifted it on to the public services that the Chancellor’s colleagues are responsible for. He has shifted it on to the Secretary of State for Health and the shoulders of NHS managers, doctors and nurses throughout the country. NHS trusts will end this financial year £1 billion in deficit. Doctors and nurses are struggling and being asked to do more and more while 100,000 NHS posts go unfilled. Does the Chancellor really believe that the NHS can wait another eight months for the life-saving funds it needs? How many people have to die waiting in an ambulance before he acts? He has mentioned the pay offer to NHS staff that we are expecting shortly. That was forced upon him by campaigns against the pay cap by the Labour party and the trade unions. Taking away a day’s holiday from those dedicated staff is mean-spirited. I ask him now: will he drop this miserly act?
The Chancellor has also shifted the deficit onto the Secretary of State for Education and head teachers, with the first per capita cut in schools funding since the 1990s. Today the Government are even trying to deprive 1 million children of a decent school dinner. I am asking the Chancellor, and I am asking every Conservative MP —[Interruption.]

John Bercow: Order. The House must calm down. There will be plenty of opportunity for questioning from Members in all parts of the House. The right hon. Gentleman must be heard.

John Martin McDonnell: I am appealing to Tory MPs today, if they are serious about ending austerity, to vote with us this afternoon to give those children the free school meal they are entitled to.
The Chancellor has shifted the deficit on to the Home Secretary and the Justice Secretary. Crime is rising, yet he has cut the number of police officers by 21,500 and the number of firefighters by 8,500, and our prisons and probation service are in dangerous crisis.
In shifting the deficit on to the shoulders of the Secretary of State for Housing, Communities and Local Government, in reality he has shifted the burden on to local councillors—Labour, Lib Dem and Conservative councillors alike. I raise again the stark reality of what that means for the most vulnerable children in our society. There has been a 40% cut in early intervention to support families. The result is the highest number of children taken into care since the 1980s. Children’s charities—not us but children’s charities—are saying that this crisis could turn into a catastrophe without further funding. Last year, 400 women seeking refuge were turned away because there were no places available for them in refuges. There are now nearly 5,000 of our fellow citizens sleeping rough on our streets—more than double the number in 2010. Tragically, one of our homeless citizens died only feet away from the entrance to Parliament.
The Chancellor mentioned additional housing funding in London. The additional housing funding announced for London today is not a new announcement: this is money already announced. Any new funding is welcome, but it is simply not enough and it represents a cut in London’s budgets compared with the money that Labour allocated in 2010. One million vulnerable older people have no access to the social care they need. Conservative  Councils are going bust. Many will be forced to hike up council tax. Councils are running out of reserves, as the National Audit Office explained to us. I ask the Chancellor: will he listen to Conservative council leaders, such as the leader of Surrey, who said:
“We are facing the most difficult financial crisis in our history. The government cannot stand idly by while Rome burns”?
How many more children have to go into care? How many more councils have to go bust? How many more have to run out of reserves before the Chancellor wakes up to this crisis and acts?
Today’s statement could have been a genuine turning point but it is, depressingly, another missed opportunity. People know now that austerity was a political choice, not an economic necessity. The Conservatives chose to cut taxes for the super-rich, the corporations and the bankers, and it was paid for by the rest of us in society. They even cut the levy on the bankers in the Finance Bill. We were never “all in this together” as they claimed—never. They cut investment at the very time when we should have been developing the skills and infrastructure needed to raise productivity and grasp the technological revolution with both hands. And when they had a responsibility to meet the challenge of Brexit, we have a Chancellor who this weekend admitted he has not even modelled the Government’s options.
Today we have the indefensible spectacle of a Chancellor congratulating himself on marginally improved economic forecasts, while he refuses to lift a finger as councils go bust, the NHS and social care are in crisis, school budgets are cut, homelessness has doubled and wages are falling. This is not a Government preparing our country for the future; it is a Government setting us up to fail.

Philip Hammond: The right hon. Gentleman supported the switch to a single fiscal event, and now he is complaining that I have not delivered a mini Budget today. I am not surprised that he cannot quite understand anybody passing up the opportunity to introduce some new taxes, because that is what a Labour Government would be doing, not once a year or twice a year but every other week.
I heard the right hon. Gentleman referring to some of my hon. Friends as “Tory bully boys”. I remind the House that this is the man who still refuses to apologise to my right hon. Friend the Secretary of State for Work and Pensions, so I do not want to hear anything about bullying from the Labour Benches. The public will draw their own conclusions.
The right hon. Gentleman knows his Lenin, of course. The task is to win power, and that is why we see from him the smooth reassuring mien of the bank manager, but every now and again, the mask slips, and we get a glimpse of the sinister ideology that lies beneath—an ideology that would wreck our economy if he ever gets anywhere near the controls, threatening confiscation, dismissing property rights, undermining the cornerstones of our economy and the basis of our freedom and prosperity.
The right hon. Gentleman talks about political choices. Let me tell him the political choices we have made. We have closed the tax gap to one of the lowest in the  developed world. We have raised £175 billion by 100 measures against tax evasion and avoidance. We are collecting 28% of all income tax from the richest 1% in our country—a higher percentage than in any year under Labour. He says that real wages are falling. I have good news for him: the OBR expects real wages to rise from quarter one 2018, which, in case he has not worked out, starts in two weeks’ time.
The right hon. Gentleman talks about spending on the disabled. Well, I have good news for him again: spending on the disabled will be higher in every year of this Parliament. He talks about research and development to support our economy. Research and development spending is at a record high.
The right hon. Gentleman reels out the same old bogus statistics on regional distribution; I think he has got the briefing from Russia Today. Let me tell him this: the Infrastructure and Projects Authority has published figures that clearly show that the highest per capita spending on transport infrastructure investment is in the north-west region, not, the last time I checked, one of the southern regions. All regions have benefited from the boom in employment. All regions will end this Parliament with lower unemployment and higher employment.
The right hon. Gentleman talks about £700 billion of increased national debt. We have had to deal with the legacy of Labour’s meltdown in 2009 because they did not fix the roof while the sun was shining. Our historical function is to clean up Labour’s mess, and my report today shows that we are doing it once again.
The right hon. Gentleman talks about funding for the NHS. I have put £9 billion into the NHS since autumn statement 2016. He talks about school budgets. School budgets are increasing per pupil in real terms. On children’s services, he must know that Department for Education research shows that spending on the most vulnerable children has increased by around half a billion pounds in real terms since 2010. We have committed £1 billion to tackle rough sleeping and homelessness and made a manifesto pledge to eliminate rough sleeping by 2027 and halve it by 2022.
No one watching our exchanges today can be in any doubt that Britain faces a choice. We have a plan to get our economy growing. The shadow Chancellor says it does not matter whether GDP grows or not. We have a plan to get people on the housing ladder, while the shadow Chancellor does not want “to get bogged down in property rights”. We have a plan to deal with our debts. The shadow Chancellor wants to send debts soaring because he fantasises that he can borrow for free.
The choice is clear: our vision of a dynamic, modern economy, or the Labour party’s vision of an inward-looking, narrow-minded country. We have to win this argument, because if we do not, it will be ordinary people—not the rich and the powerful and not the globally mobile—who pay the price, as they always do for Labour’s failings.

Kenneth Clarke: I congratulate my right hon. Friend on his very forceful statement based on competent government and grown-up politics, which are worlds that the shadow Chancellor will never enter. When my right hon. Friend comes to prepare his Budget for November, I am sure he will be looking for  any new source of taxation that may be needed to put even more money than he already has into the NHS and social care, which are facing vast increases in demand.
May I suggest that my right hon. Friend looks at some of the extraordinary anomalies he has inherited in the tax treatment of older prosperous people in full-time work in this country? [Laughter.] Well, I think I am perfectly well placed to make my point and cannot be accused of personal bias. It is absurd that older employees pay less tax on their income than their younger colleagues because they do not pay national insurance. It cannot be right that people in large houses enjoying capital gains from the housing market have those disregarded for means test purposes if they ever need certain types of social care. As the early Budgets in a Parliament are a time for tough and difficult decisions, will my right hon. Friend let me know that he will be looking at those much overdue anomalies, which need to be addressed? Some justice between the generations, I think, is being demanded by our constituents.

Philip Hammond: I am a great fan of the concept of intergenerational fairness. My right hon. and learned Friend will know, as a former Chancellor of the Exchequer, that all Chancellors look at all options in the run-up to every Budget. I can undertake that I will do so in the run-up to Budget 2018. In the meantime, I can tell him that there is a mechanism for voluntary donations to Her Majesty’s Treasury, and in case he has mislaid it, I will send him a copy of our bank details.

Ian Blackford: I have to say, that was much ado about nothing. The real tragedy is that we are 10 years on from the financial crisis, but austerity is still with us, and there was a lack of hope given to the people of the United Kingdom from the statement today.
At the weekend, we saw the hon. Member for Moray (Douglas Ross) at the Glasgow Celtic versus Rangers football match, in his other job as a linesman, waving his flag and enthusiastically calling for a red card. If anybody deserves a red card today, it is the Chancellor of the Exchequer.
We hear the Chancellor proclaiming that we have had consistent economic growth since 2010 and that we can look forward to continued economic growth over the course of the coming years. The reality is that in 2019, when we are supposed to be leaving the European Union, the OBR predicts that growth will be a measly 1.3% and is forecast to remain at around 1.5% over the coming years, significantly below the historical trendline of growth for this country.
When I hear the Chancellor talking about wage growth, he ought to reflect that we have had a lost decade of wage growth in the United Kingdom. Let me prick his balloon on this one, because the OBR book is very clear that real earnings growth will “remain subdued” for the next five years. That is the reality, and perhaps the Chancellor should stop spinning and be honest with people about what is going to happen. The Chancellor talks about light at the end of the tunnel. Let me tell him that the light at the end of the tunnel is a hard Brexit and the impact of lower growth, which is going to cost jobs and prosperity in this country.
Slow earnings growth, higher inflation and cuts to the benefit system are resulting in falling incomes for the poorest households and in rising inequality. Once  again, the Chancellor has failed to bring his Government’s disastrous austerity programme to an end. Worse still, he has his head firmly in the sand over Brexit.
This Government are going ahead with a devastating cut to Scotland’s budget. [Interruption.] I hear the Scottish Tories shouting “Rubbish”. Perhaps they could join those of us on the SNP Benches and defend Scotland’s interests. Let me explain the reality: over the decade from 2010-11 to 2019-20, Scotland’s block grant has been cut by £2.6 billion in real terms, which is an 8.1% cut. [Interruption.] The people of Scotland should watch the Scottish Tory MPs who are calling out: once again, they are failing to stand up for Scotland’s interests. [Interruption.] Let me say respectfully that these Tory MPs have been here for quite some months, and they should understand that if they want to speak, they should try to catch your eye, Mr Speaker. It is undignified to call out in the way they are doing. [Interruption.]

John Bercow: Order. There is much excitable gesticulation taking place on both sides of the House. I urge Members to keep their Order Papers to themselves, and not to lash out with their hands, gesticulating in all sorts of directions. They are in danger of becoming rather eccentric denizens of the House.

Ian Blackford: Thank you, Mr Speaker. These are, after all, serious matters. The extent of the block grant reduction is highlighted by the Fraser of Allander Institute, which has noted:
“By 2019/20 the resource block grant will be around £500 million lower than in 17/18”.
I pay tribute to my hon. Friends on the SNP Benches who fought so hard on behalf of their constituents to have Police Scotland and Scottish Fire and Rescue Service VAT scrapped. That was a fantastic result. However, the reality is that Scotland has suffered under this policy for the past five years. Will the Chancellor be bringing forward plans to return the £175 million that has already been paid? VAT should never have been charged: it was a vindictive measure imposed on Scotland by a Tory Government. Give Scotland back the £175 million to invest in our frontline services. Will Scottish Tory MPs join the SNP in standing up for Scotland, or will they remain silent on the cash grab we have seen from Westminster?
This Tory Government’s austerity policies disproportionately affect the most disadvantaged individuals, while giving tax breaks to the better-off in society. The Resolution Foundation recently estimated that the Government’s austerity programme will leave the poorest third of households an average of £715 a year worse off by 2022-23. In Scotland, we have a new progressive income tax policy. [Interruption.] I can hear Conservatives saying, “Up”, but the reality is that for most people in Scotland tax is lower. The Scottish Government are able to reverse this year’s real terms budget cut inflicted by this Tory Government, and ensure that the majority—I repeat, the majority—of taxpayers in Scotland pay less than in the rest of the UK.
However, Scotland’s new taxation powers should not exist simply to mitigate UK Government austerity. In Scotland, the SNP Government have gone further to support those on low incomes. In the recent budget at Holyrood, a package was secured that raises the threshold of a guaranteed 3% increase for those earning up to  £36,500, benefiting up to three quarters of Scottish public service workers—a Scottish Government on the side of hard-working public sector workers.
As we near the EU summit at the end of this month in Brussels, the progress of this Government in readying for Brexit has been nothing short of shameful. The UK Government’s own analysis tells us that, under all scenarios, Scotland would suffer a relatively greater loss in economic output than the United Kingdom as a whole. A no-deal scenario would be significantly devastating, threatening to reduce growth by a massive 9% over 15 years.
Make no mistake: a hard Brexit is going to hit the pockets of families and lead to a loss in tax revenue expectations, and is therefore going to affect spending on public services, yet the Chancellor is silent on the risks to our economy—risks to our economy when the stresses and strains of a near decade of austerity are hurting. The fact is that Scotland is shackled to a sinking ship.
The Scottish budget passed last month illustrates the real divergence in political choices across the UK. In Scotland, we have chosen to stand by our outstanding public sector staff and give them the pay increase they deserve. We continue to mitigate the worst atrocities of this Government’s ideological austerity agenda. We will continue to press for nothing less than continued UK membership of the single market and customs union to prevent the economic catastrophe of an extreme Tory Brexit. We will never stop fighting to get justice for the 1950s women, whom the SNP are so happy to support.
In conclusion, the choices are clear and the opportunities obvious. The Chancellor must wake up to the economic injustices he has overseen, and he must tell this House as a matter of urgency how the economy will stand a hard Brexit.

Philip Hammond: Probably a matter of rather more immediate urgency for the people of Scotland is how their economy will withstand the highest rates of taxation in the United Kingdom—an economy that, under the SNP Government, is already growing more slowly than the economy of the United Kingdom. I do not know about a sinking ship; I suggest to the right hon. Gentleman that this is about keeping afloat.
The right hon. Gentleman talks about earnings. I suggest that he looks at real household disposable income, which, as I am sure he knows, is now 4.4% higher than at the start of 2010. We have cut taxes for 31 million people across this country, at a time when his Government are putting taxes up. We have taken 4 million people out of taxation, improving the ability of people to retain their hard-earned incomes.
The right hon. Gentleman talks about Brexit, spreading alarm, but he knows very well that my right hon. Friend the Prime Minister is working tirelessly to deliver a Brexit that will secure British jobs, British businesses and British prosperity. We would be aided in that enterprise if he and his Government worked closely with us to deliver an outcome that is good for the whole of the United Kingdom.
The right hon. Gentleman talks about Scotland’s budget and the block grant, but of course Scotland now has its own tax-raising powers, and the people of Scotland  know how he intends to use them. Perhaps he has forgotten, but I will try to help him with his short-term amnesia: at the autumn Budget in 2017—just four months ago—Scotland received an additional £2 billion of funding as a result of the measures announced then.
As for the VAT on police and fire services measures being vindictive, the Scottish National party Government were told explicitly that it would not be possible to refund VAT if they went ahead with the police reorganisation, and they decided to do so anyway. He may use the adjective “vindictive”, but I suspect my right hon. and hon. Friends will be able to think of another adjective to describe a Government who pursued such a ridiculous course of action.

Several hon. Members: rose—

John Bercow: Order. I gently remind the House that, whatever impression might have been given so far, this is not a debate; it is a question and answer session following a ministerial statement.

Nicky Morgan: I congratulate the Chancellor on his balanced approach. He and the Prime Minister have rightly identified housing as an economic and social priority. He will be aware that the Treasury Committee’s report on his autumn 2017 Budget recommended that the housing revenue account borrowing cap could be lifted to allow local authorities to play their part in building the right homes in the right places. Is that something he will consider?

Philip Hammond: I am grateful to my right hon. Friend. We have already relaxed the borrowing cap for local authorities in areas with high demand and low affordability. We will monitor the consequences carefully and keep how it delivers under continuous review.

Chris Leslie: The light that the Chancellor can see at the end of the tunnel is the Brexit locomotive barrelling headlong towards him, and towards our schools and hospitals. What will he do to prevent that free trade agreement-style scenario, which his own Treasury officials say will leave a £55 billion train wreck in our public services?

Philip Hammond: As the hon. Gentleman knows, I am committed to delivering a Brexit that protects British jobs, British businesses and British prosperity, and I spend a significant amount of my working time ensuring that that is the route we follow. I expect that we will make further progress at the March European Council. I understand the concerns that he expresses on behalf of British businesses, but I talk to businesses all day, every day, because that is my job—[Interruption.] The shadow Chancellor says so does he, so he will know this already. Business is concerned about what the consequences of a bad Brexit deal could be, but business is much more concerned about the consequences of the policies advanced by his right hon. Friends on the Opposition Front Bench.

Iain Duncan Smith: May I say what a huge pleasure it is to hear the Chancellor so upbeat, and indeed Tiggerish? He has a right to be so, given that unemployment is at its lowest level for 40 years, and manufacturing is seeing  its best performance for 50 years. Given his answer to our right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) on looking at every avenue for money, and given that we will be about four months away from our official departure date, at the next Budget will my right hon. Friend consider setting out in the Red Book what he plans to do with the money that we will no longer have to pay in contributions to the European Union?

Philip Hammond: It is always a pleasure to hear from my right hon. Friend. We are absolutely not complacent, because there are many challenges as well as opportunities ahead of us, but we have a plan to embrace the opportunities and rise to the challenges. This country has many advantages that our neighbours would give their right arm to enjoy. We must go forward robustly and in good heart to seize those opportunities and make the best of them for the future. On his specific point, of course in the forthcoming Budget we will look at taxation and spending over the future period. The OBR, of course, will decide what to present in its report to the House. He will have an opportunity to question OBR officials about their approach when they appear before the House shortly after the Budget statement.

Rachel Reeves: Consumer credit has risen by 9% over the past year, and the ratio of household debt to income, at 138%, is rapidly approaching a level not seen since before the financial crisis. With interest rates now forecast by the OBR to rise faster than we previously envisaged, are we not asking consumers to keep the wheels on the road for the economic recovery? Is that sustainable, and is that the right thing to do?

Philip Hammond: The hon. Lady is right to raise this issue. It is something we keep under constant review, and I talk regularly with the Governor of the Bank of England about personal debt. She will probably know that personal household debt rose in all but one of the 13 years of the Labour Government, and it is now lower than it was before the financial crisis. The judgment of the authorities at the moment is that household debt levels are sustainable, but she is right to draw attention to it. It is something we keep under close review.

Justine Greening: Can the Chancellor give more detail on the announcement that the Office for National Statistics will work with the Treasury on a more sophisticated measure of human capital? In a knowledge-based economy, that becomes more crucial than ever for driving our economic productivity. Can he give us more detail on the timelines and the nature of that work?

Philip Hammond: I am glad that my right hon. Friend has asked this question, because it gives me an opportunity to thank her for sparking this line of inquiry in a letter she wrote to me. I did challenge the Treasury with the idea that it is more focused on the returns to infrastructure investment than on skills investment. When we looked at it in detail, we discovered that the metrics for measuring the returns to investment in human capital are not as well developed as they should be. That is something the ONS has to take forward, but it is important, as we move increasingly into a knowledge-based economy, with a huge set of technological changes ahead of us,  that we can compare appropriately and objectively investment in physical infrastructure with investment in human capital, and that is what we will be able to do if we get the new metrics right.

Alistair Carmichael: The Chancellor of the Exchequer is doubtless aware that the OECD this morning published its own growth forecasts, putting us at the bottom of the OECD economies, with forecast growth this year of 1.3%. It is pretty clear that there is no Brexit dividend on the scene for the British economy. It is to be welcomed that the deficit is getting back to a manageable level, but he must know—even his own Back Benchers are telling him—that extra money is needed now for our hospitals, our schools and our police. That money is not there because of previous decisions to make premature cuts to capital gains tax and inheritance tax. He must have heard the Institute for Fiscal Studies calling for increased capital investment in housing, up to 3% of our economy. Why does he not listen to the IFS?

Philip Hammond: First, the right hon. Gentleman knows, as I do, that our economy still faces uncertainty as we go through the negotiation process with the European Union. I am convinced, from every conversation I have had with business leaders and investors, that as we deliver greater clarity about our future relationship with the European Union over the coming months, we will see business investment and consumer confidence increasing. We beat the forecast in 2017. Let us beat it again in 2018. I do believe that economic growth matters. The shadow Chancellor says that it does not matter what the level of GDP is, but I do not agree—[Interruption.] Well, I will send him the quote if he cannot immediately recall what he said. I do believe that GDP matters, because it is what drives living standards. We are putting extra money into public services—£11 billion since I have been Chancellor. I agree that we have a major challenge in the housing market. We have put a significant amount of money—£44 billion—into dealing with the challenge over the rest of this Parliament, but there are significant non-financial constraints on being able to do more, such as physical bottlenecks in relation to skilled labour and materials. But it is something we will keep under review.

Edward Leigh: Perhaps the current Conservative Chancellor of the Exchequer could remind the previous Conservative Chancellor of the Exchequer that, given where our electoral support comes from, it might not be wise politics to impose a targeted new tax on our older supports. He could also remind our right hon. and learned Friend that he will be delighted to know that after we leave the EU we will be saving £12 billion a year in contributions.

Philip Hammond: I assume that my hon. Friend is referring to the previous Conservative Chancellor but one, in which case I think our right hon. and learned Friend has probably heard him.

Yvette Cooper: The winter crisis in the NHS left us with cancelled operations, ditched targets, patients sleeping on the floor, and a public apology in the end from the Prime Minister. Neither the spring nor the spring statement  has provided any easing of those pressures. Given that the right hon. Gentleman knows the November Budget will be too late to provide any additional funding that he knows both the NHS and social care will need for next year’s winter crisis—he knows this both in his heart and in his spreadsheet—will he now follow the Prime Minister and announce a public apology to the staff and patients of the NHS who are going to have to endure next year’s crisis because of this failure?

Philip Hammond: I have already made it clear that we admire greatly the work of NHS staff who, with the pressures of flu and extreme winter weather, faced extremely difficult circumstances this winter. This is a spring statement, not a fiscal event, but I have said and I will say again to the right hon. Lady that we are putting an additional £4 billion into the NHS in 2018-19, and I have committed to putting in further money in-year in 2018-19 to fund a pay settlement for nurses and Agenda for Change staff, if the management and the unions reach an agreement.

Damian Green: It is very welcome to hear from the Chancellor such good news on debt and growth, in particular their effect on the real lives of people in my constituency, where since 2010 youth unemployment is down 48% and apprenticeships are up 6,850. In continuing his successful balanced approach, will he commit to dealing with the social care sector, because we both know it will become an increasingly important issue in the years and decades ahead?

Philip Hammond: I am grateful to my right hon. Friend, who has done a great deal of work on this issue. We are absolutely aware of the pressures on the social care system. They are not short-term pressures; they are driven by the demographics of an ageing population. We have to do three things. In the short term, we have provided additional money. In the spring Budget last year, I put in £2 billion of additional support. My right hon. Friend the Secretary of State for Housing, Communities and Local Government put in another £150 million of social care grant at the local government settlement just a few weeks ago. In the medium term, we have to work to get all authorities meeting the standards of the best. There is excellent practice across the country, but it is not everywhere. The variation in delayed discharges between different authorities is completely unacceptable. In the long term, we are committed to publishing a Green Paper on social care and the future of social care, which we will deliver to the House before the summer recess.

Alison McGovern: The Chancellor says that forecasts are there to be beaten and I agree with him, so can he explain to me why, since his Budget in November, the OBR has not been able to increase the growth forecast for 2019, 2020, 2021 or 2022? It cannot be the negative impact of Brexit, because the OBR still does not have the information from the Government to be able to forecast that, so what on earth is his excuse?

Philip Hammond: I will perhaps remind the hon. Lady that the OBR’s autumn report in November was only four months ago and that in the normal course of events one would not expect, in the absence of some shock to the economy, economic forecasts to change  very significantly. The front-end forecast has changed, because the out-turn for 2017-18 has changed. The OBR forecast growth 0.2% lower than it turned out to be in 2017-18 and that has a knock-through effect, which has increased its growth projection for this year.

Stephen Hammond: Investing in our economy creates jobs and growth, and successful businesses drive that. Will my right hon. Friend tell the House how much the corporate tax take has gone up since the cut in corporation tax? Will he confirm that he will do nothing to hinder our internationally competitive corporate tax rates?

Philip Hammond: Yes, I can. I am happy to tell my hon. Friend that since we reduced the rate of corporate tax to 19%, the yield—the amount of tax we raise for our public services, our hospitals and schools—has gone up 54%. It is clear that being one of the most competitive tax jurisdictions in the G20 is one of the determining factors in many investment decisions coming to the UK, creating the jobs and prosperity we need for the future.

Sammy Wilson: The Chancellor is right to talk up the UK economy when there is good news, because there are plenty in this House who will recklessly talk it down. There was, however, one gap in today’s statement. He promised an inquiry, in time for the autumn Budget, into air passenger duty and VAT on the hospitality industry. When will he make an announcement on when that inquiry will start and on the terms of it?

Philip Hammond: I have laid a written ministerial statement today that sets out the reviews and consultations, and that is among them. If the right hon. Gentleman looks at that after this statement he will see that it is there.

Mark Harper: May I draw the attention of the Chancellor to the recent research published by the International Monetary Fund, which shows that the choice we made in 2010 to deal with the deficit primarily by controlling spending rather than raising taxes, as the Opposition would have done, was the right choice? It meant that the economy grew faster than those of our European competitors and has put him in the position where he can deliver more money for our priorities, while reducing the debt in the balanced way he has set out.

Philip Hammond: I am grateful to my right hon. Friend. He is right: it was the right choice. Because we made that choice, throughout that period employment in this country continued to grow. We avoided the very high levels of unemployment suffered by many of our European neighbours. We avoided the catastrophic, generation-blighting levels of youth unemployment suffered by many of our European neighbours, which will be affecting their economies and societies not just for a few more years but for 30, 40 or 50 years to come. It was the right decision. We have executed our plan and we should stick to it.

Angela Eagle: The Chancellor has been very upbeat today, but why is he so upbeat when the growth figures show that we have gone from being near the top of the G7 and the G20 growth lists to the bottom of both?

Philip Hammond: I am clear—I think I have alluded to this already—that one of the factors depressing the forecast growth is the uncertainty that still exists around the economy. If the hon. Lady, like me, expects that uncertainty to dissipate over time, she should look through it to the fundamentals of our economy and its underlying strengths. This economy is in a fundamentally good shape. Once we can restore confidence and certainty about our future path, I am confident that those fundamental strengths will deliver increased economic growth.

James Cartlidge: My right hon. Friend made a fantastic statement. Does he join me in welcoming the 65% fall in youth unemployment in South Suffolk since 2010? Does he agree that while my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) is entirely right to mention inter- generational fairness, the worst form of intergenerational unfairness would have been to allow our youth unemployment to peak at socially dangerous levels, as it has in the rest of Europe?

Philip Hammond: My hon. Friend is absolutely right. I welcome the very large fall in youth unemployment in his constituency, but that will be from a base that was very much lower than what has come to be considered normal by many of our European neighbours. As he rightly says, this is not just an economic factor, but a societal factor. Persistent high levels of youth unemployment have a hugely damaging effect, as we have discovered in the past in this country to our cost. If someone is unemployed during their formative years, they are far more likely to remain unemployed and unemployable for the rest of their working lives.

Wes Streeting: It is astonishing that Brexit, the single biggest risk to the economy, merited only two sentences in the Chancellor’s otherwise uneventful spring statement. If the economy and economic outlook are so rosy, perhaps he can explain why almost every school in my constituency is facing budget cuts, why my local NHS trust is in special measures, and why, when my constituents are crying out in the face of one of the worst waves of burglaries we have ever seen, the police are not responding because the Metropolitan police is subject to real-terms budget cuts. Is that not the grim reality facing our country, and is it not set to get worse because of the hard Brexit course his Government are following?

Philip Hammond: No. The Government are pursuing a Brexit that protects British jobs, British businesses and British prosperity, as the hon. Gentleman well knows. We have protected school funding so that it will rise in real terms per pupil over the next two years, and as we move to the fair funding formula for schools, every school will receive a cash increase. The police settlement on which the House recently voted provides £450 million of additional resource for police forces across the country. We have protected police budgets since 2015.[Official Report, 24 April 2018, Vol. 639, c. 8MC.]

Jacob Rees-Mogg: The OBR’s report—I refer to table B.7 and chart B.4—assumes that the Brexit dividend will be recycled into ordinary expenditure. I wonder whether the Chancellor  accepts that conclusion. If so, what thought has he given to spending this money, and is the NHS near the top of his list?

Philip Hammond: As I suspect my hon. Friend knows well, this is the assumption that the OBR has adopted at the last three fiscal events. It has assumed that any saving from a lower contribution to the European Union will be recycled to fund things that would have been funded by the EU, but will no longer be so. How we choose to use that money and what our priorities are will, of course, be an issue for this Parliament, but we should note that we have already made certain commitments—to our agricultural community, for example—to maintain spending at EU levels until the end of this Parliament.

Caroline Lucas: I have to say that the levels of hypocrisy from the Government are quite extraordinary. How can the Chancellor pledge to be improving air quality while simultaneously boasting of undertaking the largest road building programme since the 1970s? How can he say that the plastics crisis is urgent and then propose a deadline for the elimination of plastics in a quarter of a century’s time? Where is the latte levy? Where is the deposit scheme? Where is the urgency for action? Why is there such a gulf between the Government’s action and words?

Philip Hammond: I am tempted to say, “Eeyore.” I think that the hon. Lady is making a fundamental mistake by linking the road building programme to air quality. I urge her to take at least a medium-term view of the world. The vehicle fleet is decarbonising. Certainly within her lifetime, if not mine, we will have fully electric vehicles, and probably autonomous ones as well. We should think of the road building programme not as a negative feature, but as an enabler in the transformation of how our vehicle fleet works. We have made announcements today, and I hope that she will be pleased with the consultation on VED for vans. This is a much-needed approach to incentivise van drivers to buy the cleanest and greenest vehicles available.

Robert Halfon: I strongly welcome the housekeeping dividend that my right hon. Friend set out in the spring statement, particularly with its focus on the cost of living and skills. In the forthcoming Budget, I ask him to continue that focus on the cost of living, to maintain the freeze in fuel duty, and to develop a skills strategy with the Department for Education to ensure that we meet the needs of the fourth industrial revolution.

Philip Hammond: If my right hon. Friend will forgive me, I will not make a commitment ahead of the next Budget on any specific tax or duty measures, but of course we will maintain the focus on the cost of living and living standards. He will know—I certainly know—that one of the biggest problems that we have faced over the last year has been the impact on real wages of high levels of inflation. Getting that inflation back down to target is a crucial priority, and I am delighted that we will see real wages rising again from next month as a result of falling inflation and strong nominal wage growth.

Chuka Umunna: I cannot believe that the Chancellor did not have more to say about the NHS in this statement. The NHS in my area is not just in crisis, but at breaking point. He refers to putting an extra £4 billion into the NHS in the current financial year, but if we extrapolate what the OBR says that the NHS will need just to keep current standards of care going and to meet rising demand, we will need at least £30 billion extra going into the NHS by 2022-23. We need a solution that can subsist across Governments of different persuasions, so will he meet the demand that the hon. Member for Totnes (Dr Wollaston) and others across both Houses have made for a proper, cross-party convention on how we put our NHS on a sustainable footing? Secondly, will he support the suggestion of the former permanent secretary of his Department for a proper, hypothecated NHS tax to help to give it the funding that it needs?

Philip Hammond: I suspect that now is not the moment for a long debate about the structural funding challenges of the NHS, but the hon. Gentleman is right. We have an ageing population. Technology is driving an ever-wider array of interventions that can and should be made to support people with medical conditions—particularly chronic medical conditions—and we have to look at how to ensure that our NHS remains sustainable in the future. Of course we are looking at that issue. I will not give him a commitment today at the Dispatch Box on how we will do that, but it is absolutely something that we need to do. I very much hope, as he suggests, that this could be done on a serious, cross-party basis, but I fear that his Front Benchers would not be able to resist the temptation to try to play politics with any such serious discussion.

Anne-Marie Trevelyan: It was excellent to hear the Chancellor talk about educational investment and our human capital. Further to the comments made by my right hon. Friend the Member for Putney (Justine Greening), will he explain further whether the Treasury will create standards that will technically value human capital across our Government Departments? That can then drive decision making so that taxpayers’ money is best spent to maximise the human capital that we invest in so much through education and training, rather than being wasted.

Philip Hammond: We have asked the ONS to look at this and to consider the metrics that we could use. The objective is to be able to assess clearly where the marginal pound of capital investment should go to achieve the best effect on the economy. Without wanting to pre-empt the outcome of that work, I suspect that in the future, in a very rapidly changing economy, we will find that retraining and upskilling will be a very large part of our investment requirement.

Alan Brown: Would the Chancellor be good enough to either meet me or send me a letter to outline the blockers to the Ayrshire growth deal, which the UK Government have not yet committed to?

Philip Hammond: It would be for my right hon. Friend the Secretary of State for Housing, Communities and Local Government to have that meeting with the hon. Gentleman, but I am very happy to pass on his request.

Andrew Bridgen: Has my right hon. Friend made any assessment of the Venezuelan economic model that is so favoured by the shadow Chancellor? I understand the Venezuelan Government have made huge progress on reducing income inequality. Unfortunately, as is always the case with socialism, they have done so by pushing 80% of the population into poverty.

Philip Hammond: Actually, while watching Russia Today, I saw a very interesting piece on the Venezuelan economy—apparently everything is going swimmingly.

Liz Kendall: In response to my hon. Friend the Member for Wallasey (Ms Eagle), the Chancellor suggested that our economy will be stronger once there is greater certainty over Brexit. Can he confirm that the Treasury analysis published last week showed that under all the Government’s Brexit options, long-term growth will be lower than it would otherwise have been? Does he not realise that that will be the true legacy of his Government and his party, which can no longer claim to act in the national economic interest?

Philip Hammond: Just to correct the hon. Lady on a couple of points, the report that she refers to, which was published by the Exiting the European Union Committee, was not done by HM Treasury. It was prepared, as I think she knows very well, by a cross-departmental group of Government economics professionals in response to the criticism that had been levied at the Treasury model that was used before the referendum. Of course it did not model the Government’s preferred outcome scenario; it modelled a couple of standardised outcome scenarios that the Prime Minister has already rejected. We are not going for a Norway model or a Canada model. We are negotiating with the EU for a bespoke solution. When we have made progress in those negotiations, we will model the outcome that we expect to get, and when Parliament comes to vote on this issue—hopefully later this year—it will have in front of it the output of that modelling.

Richard Drax: I congratulate my right hon. Friend on his upbeat performance, and on standing up for the economy and our country. As a former soldier, may I put in a plug for our armed forces? They undoubtedly need more money. We live in dangerous times. Will he take that into account in the Budget?

Philip Hammond: As a former Defence Secretary, I yield to no one in my admiration for the armed forces. I understand the challenges that defence faces and the complexity of the defence budget, with its many long-term projects operating at the cutting edge of technology. In case there is any misapprehension, however, I would like the House to be absolutely clear that defence will receive more than £1 billion of additional funding in each year of this Parliament. It has the fastest-growing RDEL—resource departmental expenditure limits—budget of any Department across Whitehall. We will, of course, continue to consider the specific needs of defence, but I would not like anyone to have the impression that, as I have read in some organs, the defence budget is being cut. It is not—it is being substantially increased.

Helen Goodman: Much is not under the Chancellor’s control, but the subject of my question is. One year ago, we were promised that Making Tax Digital would be put back to help small businesses, but in the intervening time—since the election—very little progress has been made in the countryside on broadband roll-out, so will he please consider putting it back by another year for small businesses?

Philip Hammond: No. We made our decision to defer Making Tax Digital mainly because there was a need for greater awareness among businesses and more time to prepare for the relevant software and so on. We are confident that businesses will be able to roll out the programme on the current schedule. Although I readily accept that there is some disquiet among potential business users, I also confidently predict to the hon. Lady that once they have got used to it, they will find that it is hugely beneficial to them, and that it saves them a lot of time and angst in their dealings with HMRC.

Chris Philp: Since 2010, the minimum wage has increased from £5.93 to £7.83 an hour—a rise of 32%. At the same time, the take-home pay of someone on the minimum wage has gone up by 37%, thanks to the increase in the income tax threshold. Will the Chancellor join me in welcoming the fact that the Government have directed assistance at those on the lowest earnings, and will he assure the House that that excellent approach will remain at the heart of the Government’s strategy?

Philip Hammond: We are focused on the needs of those on the lowest pay who are in the workforce. Making work pay, particularly low-paid work, is a priority. I repeat what I said in the statement: partly as a result of the introduction of the national living wage and its subsequent increase to £7.83 an hour, income inequality in this country is now lower than at any point under the last Labour Government. It is falling in this country while it is rising in all other G7 countries.

Laura Smith: Today’s statement was an opportunity for the Government to ease the burden on care providers by offering a solution to the sleep-in crisis. Sleep-in shifts are an integral part of public services which the Government have a statutory obligation to provide. Have the Government ruled out paying directly and in full the six years of back pay to which low-paid careworkers are entitled?

Philip Hammond: I am not sure about the end of the hon. Lady’s question. Is she asking whether the Government have ruled anything out? The Government have not ruled out anything—we are still considering this issue. Of course these workers must have the pay to which they are entitled and which they should have been paid. What we are doing—the Cabinet Office is leading on this—is working with the key providers to see how best to deliver that in a way that does not have negative impacts on the provision of care.

Simon Clarke: Youth unemployment in my constituency has fallen by 55% under the Conservatives, which is fantastic news. Does my right hon. Friend agree that the last thing young people in Teesside need is a reckless borrowing binge to reverse that progress?

Philip Hammond: My hon. Friend is absolutely right. Over the past few years, parts of the country that have suffered for far too long from low employment and investment have seen increased investment—much of it foreign investment—as well as increased employment and rising wages. They absolutely do not need to take risks on the kind of policies that the shadow Chancellor is proposing, which would plunge us back into a place we have been before and have no wish to revisit.

Alison Thewliss: People doing the same job should be entitled to the same day’s pay, but the Chancellor continues to ignore the fact that his pretendy living wage is not for under-25s, as 21 to 24-year-olds will earn 45p less an hour; 18 to 20-year-olds £1.93 less; 16 and 17-year-olds £3.63 less; and apprentices a full £4.13 less. Why does he believe in state-sponsored age discrimination?

Philip Hammond: The hon. Lady will know, I think, that we also announced—again, this is due to come in in April—record increases in the youth rates of the minimum wage. We have had several exchanges in this Session about the importance of maintaining low levels of youth unemployment and about the devastating effects of youth unemployment—[Interruption.]. I am sorry if she does not like this. The Government take advice from the Low Pay Commission about the impacts of different pay rates on employment prospects, and we balance the need to give people a fair wage with the need to maintain high levels of youth employment, in the interests of those people themselves and of our economy.

Jeremy Quin: I welcome the projection that real wages will increase in the coming year, but that can continue in the longer term only if we improve our productivity. In that context, may I welcome not only what the Chancellor has said about human capital and long-term endeavour, but the improvements in productivity over the last six months?

Philip Hammond: Yes, and my hon. Friend is right to draw attention to two quarters of very good productivity data. I do not want to change policy or to pivot on the basis of two quarters’ data, because data can be revised, but we are starting to think that we might just be at the beginning of a turn in the trajectory of productivity performance in this economy.

Louise Ellman: Liverpool has many success stories, but 30% of its children are in poverty and our public services are under pressure as Liverpool City Council loses 68% of its funding. The whole economy is threatened by Brexit. What will the Chancellor do differently to address these injustices?

Philip Hammond: Obviously the best way out of poverty is to get people into work, and the proportion of workless households is at its lowest level since records began. The hon. Lady will know that 200,000 fewer children are in absolute poverty than was the case in 2010. We are focused on using our modern industrial strategy to drive economic growth across the regions of our country, and on working with the elected Mayors and the devolved authorities to ensure that the necessary  investment is made in all corners of the British economy to deliver the growth that is the only way to get people sustainably out of poverty and into well-paid work.

Anne Marie Morris: May I congratulate the Chancellor on his progress to date, but ask him to consider investing in a long-term innovative strategy for transport infrastructure—road, rail, air and sea—in the south-west so as to drive productivity north and south of the peninsula, and to include a commitment to such a strategy in the Budget so that we build a great south-west to rival the northern powerhouse? We thank him for his support for the Peninsula Rail Task Force. It is welcome, but not enough.

Philip Hammond: My hon. Friend will have to think of a snappy name for that—if she can, please will she let me know?
We are investing already in the south-west, including, as my hon. Friend will know, in the crucial A303 programme—£2 billion in a vital transport artery feeding the south-west. I know that many of the bids to the housing infrastructure fund come from south-west authorities, and we are acutely conscious that as we ask authorities to build more homes, we must provide them with the resource to build the supporting infrastructure—that is the purpose of the fund. I hope that she will get some good news when my hon. Friend the Housing Minister makes announcements in due course.

Stephen Timms: The number of apprenticeship starts plummeted after the botched introduction of the apprenticeship levy last year. I welcome the additional support for apprenticeships in small businesses that the Chancellor has announced today, but does he recognise that to get anywhere near the 3 million target by 2020 will require much more radical action, and will he return to that at the time of the Budget?

Philip Hammond: Our target—our commitment—is to deliver 3 million apprenticeships by 2020. The introduction of the apprenticeship levy changed the game, and we were always anticipating that it would have an impact on the profile of starts. The additional £80 million announced today is targeted specifically at small, non-levy-paying businesses to help them to take on apprentices. In a couple of weeks, at the beginning of April, large businesses that pay the levy will be allowed to transfer 10% of their levy funds to small businesses in their supply chain to support their engagement and training of apprentices. We will, however, keep the programme under close review. This is a commitment that we must deliver, and if we need to intervene in a different way to deliver it, we will.

Huw Merriman: According to page 193 of the OBR report,
“The future is uncertain and the likelihood of unexpected…political developments means…there are significant…downside risks to…forecasts for the public finances.”
Does the Chancellor see any of those political downside risks sitting directly in front of him?

Philip Hammond: Yes. As I said earlier to an Opposition Member, in conversation, businesses—[Interruption.] Perhaps I should just sit down while the shadow Chancellor conducts his own conversation.
As I said earlier, businesses, in conversation, identified two risks about which they were concerned: the risk of a bad Brexit deal, which will have an impact on our economy, and the risk of the right hon. Gentleman’s ever getting his hands on any of the levers of power in our economy. Of those two, there is no doubt that business—as represented in the voice of Paul Drechsler this morning—regards the risk posed by the right hon. Gentleman as by far the bigger.

Marsha de Cordova: The Chancellor has claimed that spending on disabled people has gone up, but we know that next month cuts in social security will hit them the hardest. He has also spoken about apologies. Would he like to apologise to the millions of disabled people whom he blamed for low productivity?

Philip Hammond: Of course I did no such thing. [Interruption.] No, I did not. We spend more than £50 billion a year on benefits to support disabled people and people with health conditions. That is a record high, and we have spent £7.5 billion more in real terms since 2010. As a share of GDP, our public spending on disability and incapacity is the second highest in the G7. It amounts to 2.5% of our GDP and to 6% of all Government spending.

William Wragg: My right hon. Friend has struck the right balance between the need for financial discipline and the justifiable need for investment in public services. With that in mind, will he ensure in the autumn Budget that additional funds are provided for schools to ensure the successful implementation of the national funding formula, which we welcomed in Stockport?

Philip Hammond: When she was Education Secretary, my right hon. Friend the Member for Putney (Justine Greening) announced that the fair funding formula would be introduced in a way that would protect per capita spending per pupil, and we would guarantee that every school would receive a cash-terms increase. That guarantee stands today.[Official Report, 24 April 2018, Vol. 639, c. 8MC.]

Stephen Twigg: My right hon. Friend the shadow Chancellor talked about the increasing number of children being taken into care. In Liverpool, there has been an 11% increase in the past 12 months alone. Local authorities in the north-west wrote to the Chancellor last month calling for additional funds to address the growing crisis in children’s social care. May I ask him to address that growing crisis, and to do so as a matter of urgency?

Philip Hammond: As I said earlier, spending on support for the most vulnerable children has increased by £500 million since 2010. There is a distinction to be drawn between services provided for the most vulnerable children—children in care, children in the adoption and fostering process, and children at risk—and the wider children’s services budgets. The shadow Chancellor has made that point several times over the past week or so. Let me repeat, however, that we are giving local authorities  £225 billion of spending power over a five-year period, and it is for them to decide how they allocate those funds.

Rachel Maclean: There can be no truer test of a Government’s commitment to fairness than their commitment to the next generation, and I know that the 7,110 young people who started apprenticeships in Redditch under this Government would agree with my right hon. Friend. Can he say more about the funds that he has set aside to help more small businesses such as those that I visited last week to access apprenticeships, and does he agree that the best place for his construction skills village is Redditch, a new town in the heart of the country?

Philip Hammond: I am glad to be able to tell my hon. Friend that there will be 20 construction skills villages. We look forward to the bid from Redditch, and I am sure that it will be considered carefully.
As I said earlier, my right hon. Friend the Education Secretary is contributing an extra £80 million specifically to help small businesses that are non-levy payers with the costs of engaging apprentices, and from April many small businesses will benefit from the flexibility that allows large business levy payers to transfer 10% of their levy funds to small businesses in their supply chain. The impression that I have from talking to the CBI and other organisations is that businesses are keen to do that, and many of them will make such transfers.

Jonathan Edwards: Is the OBR right to calculate in its report that the United Kingdom will be making payments to the European Union until 2064 as part of the divorce settlement and that that will not include any new commitments that the British Government may make in the remaining parts of the negotiation? Would it not be better just to stay in the EU?

Philip Hammond: The payment profile has three parts. There are payments during the two years—more or less—of the implementation period; there are payments as the EU dispenses the so-called reste à liquider over the following few years; and then there is a very long tail of what will actually be very small payments relating to pensions. Of course, by their nature, they will stretch over a very long period, but they are very small amounts of money.

John Stevenson: Carlisle Lake District airport is about to open for passenger flights; we have a garden village development south of the city; and there is the prospect of a borderlands growth deal. Does the Chancellor agree that the only way to grow the economy and balance the books is through such investments? Does he also agree that it is important for the Government to support local initiatives of that kind, because they will help to rebalance the economy and sort out our finances?

Philip Hammond: Yes. Local government, local people and local businesses understand best how to grow the economies of their regions. I welcome the initiatives that my hon. Friend has mentioned. I am aware of the garden village, and I look forward to perhaps being able to visit it in the spring.

Seema Malhotra: Is it not true that young people in our communities are paying the biggest price for this Government’s choices and failures? Local government faces a funding gap of £5.8 billion by 2020. The income of my local council, Hounslow, has been cut by 40% since 2010, with more to come. There are 400,000 more children in poverty than five years ago, and in some wards in my constituency the proportion is now hitting 40%. The Chancellor asked to be judged on his record. Is that a record of which he is proud?

Philip Hammond: Yes, it is, because the figures given by the hon. Lady are not quite right. There are 200,000 fewer children in absolute poverty than in 2010. [Interruption.] Absolute poverty is the relevant measure. The crucial point that she simply skirts around is that, after the financial crash during the last Labour Government, we could have gone down a route that many of our continental neighbours went down, which would have seen hundreds of thousands, if not millions, of young people cast on to the scrapheap of unemployment and left there potentially for decades. We did not go down that route, and we have seen youth unemployment in this country relatively low and falling, and that is a huge benefit to the next generation, who will be able to benefit from their engagement in the workforce and, as they go forward, from rising living standards.

Andrew Jones: I welcome my right hon. Friend’s statement and the balanced approach to the economy he detailed. I particularly welcome the attention on digital and skills, as these are the main issues businesses are raising with me, and I hope Yorkshire will be one of his local full fibre allocations. Will he continue to focus on fibre and digital as critical to boosting our national productivity?

Philip Hammond: Yes, if we do not have these enabling network technologies—a good fibre-optic backhaul network, good digital technologies—we will not be able to exploit the technologies of the fourth industrial revolution, and we must do so.

Neil Gray: The Office for Budget Responsibility says that real earnings growth for the next five years is expected to remain subdued, averaging just 0.7% a year, and real household disposable income per person is expected to average only 0.4% per year. So why will the Chancellor not properly fund his Departments to ensure that the public sector pay freeze is properly lifted, as has been done in Scotland?

Philip Hammond: The public sector pay freeze has been lifted: we have removed the 1% cap, so it is up to departmental Secretaries of State to make appropriate recommendations and provide appropriate evidence to pay review bodies. But we do expect them, where they recommend settlements above the level they are already funded for, to use workforce management measures and efficiency improvement measures negotiated with the workforce, to ensure that over time increases are self-funded through higher efficiency and productivity.

Mark Pawsey: The Chancellor is right to focus on how the tax system might be used to encourage improvements in the environment, and I  know that the packaging industry recognises the need to reduce waste and will respond positively to his call for evidence. I ask for it to include two things: first, that it is people who cause litter, and the Chancellor spoke about the need for behaviour change; and, secondly, will it recognise the important role packaging has in reducing food waste by keeping food fresh for longer?

Philip Hammond: Yes, of course, and the point of having a call for evidence is to make sure that the decisions we make are based on full knowledge and full information. My hon. Friend makes a very important point: it would be massively shooting ourselves in the foot to make a change in relation to packaging that then massively increased food waste and the energy cost of food that was wasted.

Carolyn Harris: Why is the Chancellor refusing to share the light at the end of his tunnel with grieving parents who are struggling to pay for their children’s funerals? Their lives are forever blighted by darkness. A children’s funeral fund is the dignified, compassionate and sympathetic thing to do.

Philip Hammond: The hon. Lady is a tireless campaigner on this issue, and both I and my right hon. Friend the Prime Minister have heard her pleas on behalf of parents in this terrible situation. I am sure, however, that the hon. Lady recognises that this is not a fiscal event; there have been no fiscal announcements today, but I am absolutely certain that she will want to make a representation to me ahead of the Budget in the autumn.

Giles Watling: I thank the Chancellor for his very spring-like statement, and it is good to hear that there is light at the end of the tunnel. What plans does he have to support our vital £90-billion creative industries sector, which is growing in my constituency of Clacton?

Philip Hammond: Creative industries is an increasingly important part of the UK economy, and one in which we have a significant comparative advantage, and the best way the Government can support the creative industries, apart from the obvious one of training and skilling, is through supporting the roll-out of digital technologies on which so many of the creative industries these days depend.

Tony Lloyd: The Chancellor’s constituency will have families on the national living wage, and I have many more. Does he agree with the Joseph Rowntree Foundation, which has demonstrated that a two-parent family with one working and two children will, because of tax credit cuts, be £450 a year worse off? That is not fair shares, is it?

Philip Hammond: The national living wage has given a pay rise of more than £2,000 a year to anyone in full-time work since it was introduced in 2015, and of course it is not just the national living wage; it is also the increase in the personal allowance, which means that people are now able to keep more of what they take home, and because it is an allowance, rather than a rate cut, it disproportionately benefits those on the lowest earnings.

Alan Mak: Fourth industrial revolution technologies are transforming and boosting productivity across the whole country, particularly in the small and medium-sized enterprise sector. As my right hon. Friend considers future spending priorities ahead of the Budget, may I urge him to continue and accelerate support for our entrepreneurs and innovators, who create the wealth of the future?

Philip Hammond: My hon. Friend is a tireless advocate of the technology that will fuel the fourth industrial revolution, and the important thing is that, while we are talking about it, this is actually happening across the country. These technologies are actually being used by large, medium and small businesses. They are not just something in the laboratory or the university classroom; they are actually happening in the factories and business parks across Britain, and they will transform the way we live and work.

Peter Kyle: I am sure the Chancellor will agree that it is not talking down the economy to report in this place the real lived experiences of the people we represent, the majority of whom will not see real average wage incomes exceeding the pre-crash levels until 2022. Does he not agree that all the measures announced today and the rhetoric will not make a difference to those who need it most until their average incomes increase above the pre-crash levels? When will that happen?

Philip Hammond: Real income growth is the principal target that we focus on, but the country suffered a recession after the financial crisis that wiped out 6% of our national income, and we are rebuilding our economy from that crisis, hindered and hampered by the fact that the previous Government were ill-prepared for the crisis when it came. As I have made clear today, we are determined to ensure that our economy and public finances are in good shape to deal with the economic cycle in the future, because we do not believe that we have abolished that economic cycle, and we have to prepare for future downturns because that is the nature of economic life.

Robert Courts: I welcome the progress made in reducing the debt and the deficit, but will the Chancellor confirm that we are still spending £50 billion in debt interest—more than the armed forces and police force combined receive—and if we do not get control of this, there will be less money for the things we value, such as the housing infrastructure fund, Oxfordshire’s excellent submission for which is so important to my constituents?

Philip Hammond: My hon. Friend is absolutely right. This is current spending; this is £50 billion that we could spend on hospitals, on schools, or, if we chose, on investment in infrastructure. The answer to this from the right hon. Member for Hayes and Harlington (John McDonnell) is to increase the amount of borrowing we have, and to increase the amount of money we are pouring down the drain every year on debt interest, reducing the amount of money available for our public services. That cannot be the right way to go.

Ruth George: In spite of the claims for what will happen to real wages on April fool’s day, the fact is that real wages are now lower than in 2010,  and debt has grown twice as fast under this Government as it did under the previous Labour Government, in spite of the global economic crash in 2008. So does the Chancellor agree that his strategy is failing people like my constituents, who are suffering from £6 billion of cuts to social care? They can no longer get care packages so they can die at home surrounded by their loved ones, but instead are stuck in hospital.

Philip Hammond: I do not agree with the hon. Lady, and her numbers are wrong, as I am sure she knows. The soaring deficit in 2009-10 has created a legacy that of course was going to lead to increasing debt. Our challenge has been to get the deficit down so that debt can now start to fall, and as debt starts to fall, we are able then to fund our public services, invest in Britain’s future, and provide some relief for hard-pressed families and small businesses through easing their tax burden, and that is exactly what we intend to continue to do.

Alex Burghart: A number of hon. Members have mentioned the next generation. Is it not the case that only this Government’s approach can really deliver true intergenerational fairness, because the alternative is ever-increasing borrowing, which would be put on the shoulders of young people?

Philip Hammond: My hon. Friend is absolutely right, and that point needs to be made more often. When the right hon. Member for Hayes and Harlington talks about borrowing an extra £100 billion, £250 billion or £350 billion—or whatever figure he is thinking about this week—and when he talks about nationalising an industry for £190 billion or whatever, he is talking about burdening the next generation with yet more debt that will blight their futures and limit their chances. That is not fair; it is not right, and we must make sure that he never gets the chance to do it.

James Frith: Some small businesses in Bury are still picking up the pieces following the Carillion collapse. Small business confidence in the north-west is at its lowest in four years, with UK skills shortages being blamed for some £3 billion of lost earnings. The Chancellor chose to come to the House today to give us this spring statement, yet he had nothing to say. We heard a fake news forecast with nothing for the real job creators. Will he give some certainty to the small businesses that are providing the jobs in towns such as mine, and will he stop this outsourcing to puffed-up vehicles such as Carillion, which appear to be too big to fail until the point when they do fail.

Philip Hammond: On the statement, the reason that I have come to the House to make this statement today is because the OBR has published its second report of the fiscal year. It is mandated by Parliament to produce two reports a year, and I think that the House would have regarded it as a gross discourtesy if I had published the report without coming to the House to answer questions on it. I am glad that the hon. Gentleman has mentioned skills shortages. He will recognise that, while skills shortages are a serious problem, it is in a sense the better problem to have, rather than having skilled people looking for employment. The work is there, the jobs are there and the economic growth is there; we now have to respond to that by delivering the skills that people need.  On outsourcing, we will continue to pursue the best value for money for every pound of taxpayers’ money that we spend, and where that involves collaborating with the private sector, that is what we will do. The way in which we have handled the Carillion situation has ensured that public services continue to be provided and that the public purse has not had to bail out a private company.

Luke Graham: I should like to join the Scottish National party Finance Secretary in Holyrood in acknowledging the additional funding for Scotland’s block grant. The extra £479 million will mean a real-terms increase over the next few years. Given that Scotland’s GDP growth is forecast to be less than 1%, will my right hon. Friend commit to driving economic activity across all our constituencies through initiatives such as the Stirling and Clackmannanshire city deal?

Philip Hammond: Yes, but it is a pity that the SNP spokesman here did not feel inclined to acknowledge the same thing. My hon. Friend is right to suggest that we are a Government for the whole of the United Kingdom. It is not the Scottish people’s fault that they have a Government who are adopting policies that are depressing economic growth in Scotland and will depress it further in the months and years ahead. We will go on delivering policies that are designed to improve the economy across the whole of the United Kingdom, including the growth deals in Scotland.

Luke Pollard: Last week, it was revealed that the Ministry of Housing, Communities and Local Government returned £1.1 billion of unused housing money to the Treasury over the past two years. That money should have been spent on recladding tower blocks that were found to be unsafe after the Grenfell Tower tragedy. Will the Chancellor use his autumn Budget to fund the work that is required to keep our tower blocks and their residents safe?

Philip Hammond: My hon. Friend the Housing Minister and I have both made the point that local authorities and social landlords that have blocks that need recladding should carry out that work. Any work that is required for urgent safety reasons should be done, and any local authority or housing association that has a genuine inability to fund the work should get in touch with the Ministry of Housing, Communities and Local Government, which will work with them to find an appropriate solution. Safety-critical work must be carried out. That is the legal obligation of the landlord, and we will work with them to ensure that it is carried out.

Maggie Throup: I welcome my right hon. Friend’s continued commitment to increasing the housing supply. I would also like to put in a bid for Erewash in relation to the construction skills villages. Does he agree that measures such as the housing infrastructure fund and the cut in stamp duty for first-time buyers will help many of my constituents to realise their ambition and aspiration to get on to the housing ladder?

Philip Hammond: Yes, the housing investment package that we have put together is important, because it has ensured that financial support will not be the constraining  factor in building more homes in this country. We have other constraints—including skills constraints, land supply constraints and materials supply constraints—but finance will be available. The measure that I announced in the autumn Budget to remove stamp duty for 1 million first- time buyers will allow 1 million mostly young people once again to aspire to the dream of home ownership.

Drew Hendry: On the Chancellor’s announcement on cashless and digital measures, he claims that he will ensure that cash will be available for those who need it. He further claims that his is the party of small business. If he stands by that, will he come to Nairn, Grantown and Aviemore to explain to businesses there why, with more than 70% of the shares in the Royal Bank of Scotland at his command, he is failing to block the closure of its branches? The Federation of Small Businesses says that those closures will make it more difficult to do business in Scotland.

Philip Hammond: It is absolutely always a pleasure to visit Nairn, but I have no immediate plans to do so. As the Prime Minister has told the hon. Gentleman and his hon. Friends on several occasions, we do not interfere in the day-to-day management decisions of the Royal Bank of Scotland—[Interruption.] Let us treat this seriously. The consultation that we published today is about cashless and digital payment systems, but it specifically acknowledges, as I said in my statement, that we also have to ensure that cash is available to people who need it. If the hon. Gentleman looks at the consultation when it is published, he will see that we are determined to address that issue. I hope that he will engage in that consultation.

Kevin Hollinrake: The Chancellor is right to look at the impacts of the VAT threshold on business. It is a disincentive to growth and an incentive to avoid tax through cash deals. Does he agree, however, that registering for VAT does not just have financial implications—it also has an administrative impact? Would this be an appropriate time to look at the entire VAT regime?

Philip Hammond: I think that that would involve widening the scope of the intended consultation rather dramatically. I remind the House that, when I referred to this issue in the autumn Budget, I said that I was not minded to lower the VAT threshold because I recognise that, at its current level, it keeps a lot of small businesses out of the administrative burden of VAT. However, we are keen to ensure that the cliff-edge effect, which has a damaging impact on businesses that are trying to grow, should be addressed if it is possible to do so. The consultation will pursue those ideas.

Rachael Maskell: There is a reason why we need to invest in our public services. In York, our schools have gone from being the seventh worst funded to the very worst funded authority, our NHS is in a capped expenditure process, and no social housing has been built. Should not the Chancellor invest in our children and in the sick, and provide homes for the homeless?

Philip Hammond: I am afraid that it is characteristic of the Opposition that it is able to see the world only through the lens of inputs—

Rachael Maskell: That is the reality!

Philip Hammond: The reality is that since 2010 we have increased the number of schools that are good or outstanding. That means that 90% of schools are now either good or outstanding, and that 1.9 million more children are being taught in good or outstanding schools. That is the metric that matters to parents and to children themselves in terms of their life chances. It is not always just about the money; it is also about the outcomes.

Ross Thomson: I welcome the measures introduced by the Government to help the oil and gas industry, including a £2 billion package of support and the introduction of transferable tax history, which has been a much-needed shot in the arm. With the industry set to contribute over £1 billion in tax to the Treasury this financial year, will my right hon. Friend tell me what further steps the Government can take to support this vital sector?

Philip Hammond: We are committed to the oil and gas industry and, as my hon. Friend knows, to measures that will ensure that every drop of economically recoverable oil and gas in the UK continental shelf is recovered, which is in the interests of the Scottish economy, the UK economy and Her Majesty’s Treasury. I am delighted that the increase in the price of oil, together with the uptick in activity as a result of that rise and of the measures that we have announced, means that the oil sector’s contribution to the UK Treasury will again become positive in the year to come.

Gerald Jones: The Conservatives have cut the Welsh Government’s budget by around £1 billion a year since 2010, and the knock-on impact on public services in Wales and on Welsh local government’s ability to deliver key services has been huge. Will the Chancellor apologise for the failed Tory austerity that has caused so much damage to public services in Merthyr Tydfil and Rhymney and across the UK? Given his outlining of a rosy picture, will he set out his plan to adequately fund the public services on which many people rely?

Philip Hammond: I do not have the figures to hand, but if my memory serves me correctly, I was able to confirm at the Budget last year that Wales will receive over £1 billion of additional funding, including as a result of changes to the agreed formula. So funding is not down, but up. The failure of services in Wales, mainly in the Welsh health service, that we regularly catalogue across the Dispatch Box is a result of decisions made and priorities set by the Welsh Government, not the UK Government.

Alex Chalk: Economies move in cycles. Does my right hon. Friend agree that there is a moral case for ensuring that our public finances are in a state to help the poorest in society, some of whom live in my constituency, when the next slowdown comes? Does he also agree that the Labour party manifestly failed to take that approach?

Philip Hammond: It did. My hon. Friend is right. It is precisely because we have seen the devastating impact of being unprepared for a serious economic downturn following a financial crash that we are determined to ensure that the UK economy is robustly prepared for the next normal cyclical downturn, whenever it occurs. Such things are normal, they happen in everyday economic life, and we must be able to ride through them without damage to our economy and without the poorest in our society paying the price. The poorest always pay when Labour’s model fails.

Matt Western: Following the global financial crash, the American Recovery and Reinvestment Act 2009, introduced by Obama, saw $800 billion of investment pumped into the US economy, leading to the most sustained period of growth. By contrast, the UK embarked on a sustained period of austerity, and UK growth is now half that of the US and the eurozone. Which was the right ideological choice?

Philip Hammond: The United States is in a different position from the United Kingdom. Sadly, we no longer operate the world’s reserve currency and are no longer able to borrow under the same conditions as the United States. Decisions on the United States economy are for the United States Administration. This Government have made the right decisions for the UK economy, and the benefit of those decisions—the outcomes that we are now beginning to see—demonstrates the case for them.

BILL PRESENTED

Housing and Planning (Local Decision-Making) Bill

Presentation and First Reading (Standing Order No. 57)
John Mann presented a Bill toremove powers of the Secretary of State in relation to the location of and planning permission for new housing developments; to give local authorities powers to establish requirements on such developments in their area, including requirements on the proportion of affordable and social housing; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 16 March, and to be printed (Bill 181).

HOLOCAUST (RETURN OF CULTURAL OBJECTS) (AMENDMENT)

Motion for leave to bring in a Bill (Standing Order No. 23)

Theresa Villiers: I beg to move,
That leave be given to bring in a Bill to prevent the Holocaust (Return of Cultural Objects) Act 2009 from expiring on 11 November 2019.
It was on 10 November 1938 when the horrors of Nazi persecution began in earnest with the shameful episode known as Kristallnacht. Lives were lost during that terrifying “night of broken glass” but a key focus of the violent attacks that took place was property—the homes, buildings and businesses owned by Jewish people. Throughout the 1930s and ’40s, property of all kinds was systematically stolen from millions of people as part of Hitler’s horrific genocidal campaign against Europe’s Jewish community. That included many precious works of art. It is estimated that up to 20% of Europe’s cultural treasures were lost during world war two, and around 100,000 cultural objects pillaged during the Nazi era still remain hidden today. The horrific crimes of the Nazis can never be remedied, but there is action that we can take to return works of art to the people from whom they were stolen.
At the end of the last century, there was growing international awareness of the risk that looted art may have been inadvertently acquired by museums and galleries. That led to the 1998 Washington conference on holocaust era assets, where a number of countries, including the UK, pledged that they would work to identify treasures stolen by the Nazis and seek to return them to their rightful owners. Compared with other European countries, it seems that little looted art found its way to the UK, but that should not be an excuse for inaction.
In 2000, the previous Labour Government established the Spoliation Advisory Panel to consider claims from anyone who had lost possession of a cultural object in circumstances relating to the Nazi era. A problem arose in 2002, when the heirs of Dr Arthur Feldman sought the restitution of four old master drawings in the British Museum on the grounds that they had been stolen by the Gestapo from Dr Feldman’s collection in March 1939 in what was then Czechoslovakia. The British Museum wanted to return the objects, but the High Court ruled that it could not lawfully do so. No matter the moral case for giving property back to the heirs of its owner, the museum was under a binding statutory obligation not to give away items in its collection. Several other national institutions were also subject to the same restriction.
That and other similar cases were raised in Parliament in 2009 by Andrew Dismore, who was the MP for Hendon at the time. He brought forward a private Member’s Bill to remove the statutory restrictions on national institutions, such as the British Museum, that prevented them from returning works of art confiscated by the Nazis. With cross-party support, the Holocaust (Return of Cultural Objects) Bill received Royal Assent on 12 November 2009. It provides that the 17 national institutions named in the legislation have the power to return works of art to their rightful owners in cases where that is recommended by the advisory panel and approved by the Culture Secretary.
However, section 4(7) of the 2009 Act contains a 10-year sunset clause, meaning that the Act will cease to have effect after 11 November next year. After that date, the institutions named in the legislation will no longer be able to return works of art to Holocaust survivors or to the families of those who perished in the genocide. The Bill that I am seeking leave to bring in would keep the legislation on the statute book by repealing section 4(7) and thus removing the sunset clause.
Parliament was entirely right in 2009 to give our national museums the power to restore property lost in such terrible circumstances to its rightful owners. The legislation was subject to exacting scrutiny and was significantly amended and clarified during its passage through Parliament. It has worked well during its eight years on the statute book, resolving cases in a fair and balanced way. Take, for example, the 12th century manuscript known as the Beneventan Missal. The advisory panel concluded that the manuscript had been looted during the chaos that followed the Allied bombing of Benevento in 1943, and, with the approval of the Secretary of State, the missal was returned to Italy. In 2015, a John Constable painting from the Tate Gallery was restored to its owner after the panel concluded that it had been stolen when the German army invaded Budapest in 1944.
The 2009 Act is a carefully targeted measure that applies to a defined and limited period and set of circumstances, so it does not open the door for more contentious claims relating to objects brought to the UK in past centuries and under different circumstances. The Act has not had a disruptive impact on our national museums. When the proposal to keep the measure on the statute book was announced in 2017, it was warmly welcomed by the museum community. Today the director of the National Gallery, Dr Gabriele Finaldi, issued the following statement:
“The museum community is committed to fair and just redress in the case of works taken wrongfully during the Holocaust and World War II. It is fully supportive of the proposal to amend the Act by removing the so-called sunset clause.”
The task of identifying and returning objects that have an incomplete history during the relevant period is by no means at an end. As recently as last September, the Government hosted an international conference in  London to consider how efforts to identify and give back works of art lost during the holocaust could be accelerated. The UK has been at the forefront of global efforts to resolve those cases in a fair way, and the 2009 Act has played an important part in that. The 2009 legislation had the backing of the last Labour Government, and my proposed Bill has the support of the current Conservative Government. I thank the Department for Digital, Culture, Media and Sport for its work, which has included engaging with the Scottish Government with a view to securing their support to reflect the fact that Scottish institutions are included in the list in the legislation.
There may still be potential claimants who are unaware of the location of artworks owned by relatives who died in the holocaust, so the moral case for this legislation remains as strong today as it was eight years ago. Indeed, the case is arguably stronger than it was in 2009. We have fewer and fewer holocaust survivors still with us. I take this opportunity to pay tribute to all the survivors who live in my Chipping Barnet constituency. I have had the great honour of meeting many of them during my years as their local MP. I thank them for all that they do to ensure that the current generation hears their testimony at first hand, as part of the efforts we must make as a society to ensure that the horrors of the holocaust are never forgotten.
Surely, it would be heartless and wrong to deprive the last survivors of their right to recover treasured works of art. Nothing can make up for the trauma and suffering of those who experienced the holocaust at first hand, or who lost loved ones in that horror, but at least we can give them back the precious works of art that were stolen from them. That is what my proposal is designed to achieve, and I commend this Bill to the House.
Question put and agreed to.
Ordered,
That Theresa Villiers, Bob Blackman, Dr Matthew Offord, Stephen Crabb, Ian Austin, Mr Edward Vaizey, David Evennett, John Mann, Andrew Percy, Charlie Elphicke, Mr Iain Duncan Smith and Andrew Rosindell present the Bill.
Theresa Villiers accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 182).

STATUTORY INSTRUMENTS (MOTIONS TO ANNUL)

UNIVERSAL CREDIT

Rosie Winterton: We now come to the four motions on universal credit, children and young persons and social security, which will be debated together. I must inform the House that the Speaker has certified the two motions on children and young persons as relating exclusively to England, and as falling within devolved legislative competence. The motions relating to those statutory instruments are therefore subject to double majority voting, by the whole House and by Members representing constituencies in England. I should inform colleagues that this is a three-hour debate. It is very well-subscribed; there are more than 40 Back Benchers wanting to speak. I hope that both Front Benchers and Back Benchers will bear that in mind.

Angela Rayner: I beg to move,
That an humble address be presented to Her Majesty, praying that the Universal Credit (Miscellaneous Amendments Saving and Transitional Provision) Regulations 2018 (S.I., 2018, No. 65), dated 22 January, a copy of which was laid before this House on 22 January, be annulled.

Rosie Winterton: With this it will be convenient to discuss the following motions:
That an humble Address be presented to Her Majesty, praying that the Free School Lunches and Milk, and School and Early Years Finance (Amendments Relating to Universal Credit) (England) Regulations 2018 (S.I., 2018, No. 148), dated 6 February, a copy of which was laid before this House on 7 February, be annulled.
That an humble Address be presented to Her Majesty, praying that the Local Authority (Duty to Secure Early Years Provision Free of Charge) (Amendment) Regulations 2018 (S.I., 2018, No. 146), dated6 February, a copy of which was laid before this House on 7 February, be annulled.
That an humble Address be presented to Her Majesty, praying that Social Security (Contributions) (Amendment) Regulations 2018 (S.I., 2018, No. 120), dated 31 January, a copy of which was laid before this House on 1 February, be annulled.

Angela Rayner: I ask all Members of the House to bear in mind what Madam Deputy Speaker has said when they make interventions. I will try to be as brief as I possibly can.
As my right hon. Friend the Member for Hayes and Harlington (John McDonnell), the shadow Chancellor, has said, this Tory Government have created a crisis on a scale that we have not seen before. Today, they did nothing to tackle it, and in these regulations they seek to make it even worse. If the House does not vote for our motions today, more than 1 million families will lose out. First, they will lose their free school meals.

Chris Philp: Does the hon. Lady agree with Channel 4’s FactCheck, which says:
“This is not a case of the government taking free school meals from a million children”.
These are children who are not currently receiving free school meals, and in fact the Government’s proposals  would see 50,000 extra children receive free school meals. Perhaps the hon. Lady could stop giving inaccurate information to the House.

Angela Rayner: The hon. Gentleman should know that his Government have introduced transitional arrangements, and we are clear that under the transitional arrangements, those 1 million children would be entitled to free school meals. With the regulations, the Government are pulling the rug from under those hard-working families.
In my own boroughs of Oldham and Tameside, a total of 8,700 children growing up in poverty are set to miss out. In the Secretary of State’s own area, the total is 6,500. So much for the light at the end of the tunnel that the Chancellor mentioned over the weekend on “The Andrew Marr Show”!

Catherine West: Is my hon. Friend aware that the Government did an assessment of the impact on childhood obesity prior to taking this statutory instrument through?

Angela Rayner: My hon. Friend makes an important point, because childhood obesity is an important issue at the moment. The Children’s Society found that 1 million children growing up in poverty will lose out on free school meals that they would have been entitled to. Incredibly, the Government have the audacity to claim that they are being generous. They want to pretend that no families will lose because the small numbers who are benefiting under universal credit will not lose out now.

Rebecca Pow: Is it not right that money should be placed where it is most needed? That is where we need the most support. When universal credit is fully rolled out, it is absolutely a fact that 50,000 more children will be getting free school meals. It is not right to mislead about this issue.

Angela Rayner: I am sure that the hon. Lady does not believe that I am trying to mislead the House. Let me be absolutely clear: many people, including MPs, wrongly believe that all children in poverty already get free school meals. That is not currently the case. But under the transitional protections under universal credit, those 1 million children would be entitled to the benefit. Through the secondary legislation, the Government are pulling the rug from underneath those families.

Jim Cunningham: Does my hon. Friend agree that this will make the working poor poorer and hit families deeply?

Angela Rayner: I am sure that my hon. Friend made an excellent point, but I am sorry to say that I did not quite catch it.

Jim Cunningham: Does my hon. Friend agree that this will make the working poor even poorer, in this day and age?

Angela Rayner: That is absolutely right—my hon. Friend did make a really important point. Those who currently get free school meals who were not part of  universal credit were in households on out-of-work benefits. If these regulations were to go through, the people on whom they would have the most detrimental effect would be those in work.
The current system would help more than 1 million more children than the plans we are voting on today. The former Secretary of State for Work and Pensions, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), once wrote that universal credit
“will ensure that work always pays and is seen to pay”,
yet under these plans, universal credit will mean that work does not pay for hundreds of thousands of families. Those just above the threshold would be better off earning less.

Iain Duncan Smith: One of the biggest and most fundamental errors that the hon. Lady and her party are making is in their understanding of what transitional protection is about. I helped to design this, so let me inform her—[Interruption.] Perhaps Labour Members would like to listen as they might learn something. Transitional protection was designed to protect those moving from tax credits into universal credit so that they did not—if this would have happened to be the case—lose any money in the transition. It was not about increasing to the degree that she is talking about the numbers in receipt of free school meals. Under universal credit, more will receive free school meals than would have been the case under Labour’s plans.

Angela Rayner: The right hon. Gentleman acknowledges the fact that under the transitional protections many more in-work families would have received free school meals than will be the case under the Government’s secondary legislation. We hope that Conservative Members will help those hard-working families by ensuring that passported benefits do apply to them. We hope that they will help out those who are just about managing, which was what the Prime Minister claimed that she was going to do in the first place.

Karen Lee: Some 27% of children in Lincoln live in poverty. Does my hon. Friend agree that this cliff-edge threshold might mean that some of those children might not get a hot meal one day?

Angela Rayner: I absolutely agree about that. [Interruption.] Conservative Members keep saying that we are scaremongering, but it is absolute fact that under the transitional arrangements that currently apply, as they do in my constituency, which was one of the first to roll out UC, free school meals do cover those applicants who receive universal credit. The regulations will remove that right for those individuals, which is scandalous.

Lucy Powell: My hon. Friend is making an excellent opening statement. Does she agree that the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) almost makes her point for her? He made it clear that this is about making sure that people who are currently in receipt of benefits and free school meals would not be worse off  when they transition, in which case they are going to be worse off under these regulations—[Interruption.] He is making that case for her. For all the huff and puff from Conservative Members, one would have thought we would remember that this is about children and families who are living in poverty in work. We should be doing our utmost to help them, not having a semantic argument.

Angela Rayner: I absolutely agree with my hon. Friend.
As I was saying, people should not just take our word for it. They should look at what the Children’s Society has said about those 1 million children who will not receive free school meals if the regulations come into force.

Imran Hussain: My hon. Friend is making a very persuasive case. In the Bradford district, more than 10,000 children who are living in poverty will miss out on free school meals, but Northern Ireland will be exempt from the same policy. Are not the Government putting their own political benefit before child poverty?

Angela Rayner: My hon. Friend makes an excellent point, which I will come on to later in my contribution. As I said, those who are just above—

Chris Philp: rose—

Angela Rayner: You have had your chance, thank you. As I said—[Interruption.] Hon. Members have been told that more than 40 people want to speak in this debate, and I am trying to give way as best I can. The hon. Gentleman has already intervened once; I think that was more than enough.
Those who are just above the threshold would be better off earning less under these proposals. The Government are pulling the rug from under their feet, because once they earn above £7,400, they will be about £400 a year worse off for each child they have in school. So just when did the Government abandon the principle that work should pay? Perhaps the Secretary of State can tell us why she will be voting for a policy that, as my hon. Friend the Member for Bradford East (Imran Hussain) said, is twice as generous in Northern Ireland as it will be for her own constituents?

Stephen Lloyd: Does the hon. Lady agree that although the Conservative party talks about making work pay, it completely demolished that with universal credit through George Osborne’s removal of work allowances, meaning that now work does not pay?

Angela Rayner: The hon. Gentleman makes an important point. Universal credit has had add-ons and add-ons ever since the Government proposed it. That has made it very complex and, as I have outlined, work will not pay for some in receipt of it if these proposals go forward.
I would like to make a little more progress and address the issue of free childcare. Once again, the Government have a policy in transition—one that they are seeking to restrict. About 200,000 two-year-olds are currently eligible for 15 hours of free childcare, but there will be more than 400,000 two-year-olds in families receiving universal credit. Ministers have refused to say  how many children will be eligible under their policy, so will they finally do so now? I ask that because hundreds of thousands of children may lose out under their plans. Once again, some of the most vulnerable children are first in line for Government cuts.

Neil O'Brien: In this House, we all believe in an honest and balanced debate, so may we just hear from the hon. Lady that it is clear that 50,000 more children will be entitled to free school meals under universal credit than under the previous system, and that 7,000 more children will be entitled to the two-year-old free offer—it is more, not less?

Angela Rayner: The Government have plucked the 50,000 figure from their own consultation document, but it had no accompanying methodology, so I am not convinced. Indeed, that makes up less than 5% of those who are in poverty. The regulations would mean that those who would currently be eligible for support under the transitional protections this Government laid out for universal credit would have that rug pulled from under them—[Interruption.] Conservative Members can keep making faces, but those are the facts.
Once again, this creates a cliff edge for families in receipt of childcare, and the policy will squeeze the income of working families who are already struggling to get by. Under universal credit, they have to pay their childcare costs up front and then claim the money back. With childcare costs rising faster than wages, meeting these costs up front will make it impossible for many working families to make ends meet, so yet another barrier is put in their way. Only months ago, several Conservative Members asked the Chancellor to look again at the taper rate because it meant that work would not pay for low-income families. Today’s vote is on exactly this issue. When the Government have already made those families bear the brunt of their cuts, adding yet another burden is just wrong.

Alex Burghart: I thank the hon. Lady for giving way; she is being extremely generous with her time. The Labour party manifesto committed to extend free school meals to all primary school pupils. This is an additional extension of free school meals to a lot more children who are in secondary school. Will the hon. Lady please tell us how much that would cost and how her party would fund it if it was in power?

Angela Rayner: The hon. Gentleman will know that the “School Food Plan” that was published in July 2013 recommended that the Government looked into free school meals for infant and junior schools. The Labour party manifesto was clear that we would just extend that. It was unfortunate that the Government chose not to do as recommended, instead just giving it to infants. If Conservative Members would like to see our costings and manifesto, I am sure I could provide that, because there were many more costings in our manifesto than there were in the Conservative manifesto—[Interruption.]

Rosie Winterton: Order. This is an extremely important and very serious debate. The hon. Lady has taken a lot of interventions. When she takes interventions, there is no point in just  shouting at her; it is important to listen to her answer. The same will go for when the Secretary of State is speaking.

Angela Rayner: Thank you, Madam Deputy Speaker.
The Government are phasing out childcare vouchers as they transition to a policy of tax-free childcare, but that policy is simply not working. The introduction of tax-free childcare has been so shambolic that the Government fell 90% short of their take-up target, and spending was less than 5% of their projection. Instead, nearly £1 billion that was earmarked for childcare was returned to the Treasury. Yet the Government are still pushing ahead with their plan to phase out childcare vouchers, which will leave families hundreds of pounds worse off and directly transfer Government support to those who are better off.

Stephanie Peacock: My hon. Friend may have seen written answers I have received from the Government showing that 10,000 of their own officials still use childcare vouchers, and the same number are signed up to a Ministry of Defence scheme. Does she agree that if Ministers will not protect their own officials, they should at least stand up for our armed forces?

Angela Rayner: I absolutely agree with my hon. Friend. The armed forces do a magnificent job for us and it is an absolute scandal that they will also be caught up in this and made worse off as a result of these measures.
Members from all parties will know that hundreds of their constituents have written letters and signed petitions to express their concerns about these policy changes, yet the Government continue to push ahead with them, and have tried to do so by the stroke of a ministerial pen. The only legislation that has come to this House is the regulations before us, which complete the phase-out for those who change employers after April. We have therefore called for a vote on the regulations, and we want to make it clear that if the House passes our motion, we are sending a clear message to the Government that it is time to think again and keep childcare vouchers available.
The regulations on universal credit apply new sanctions to those who are currently protected and cut the time period that claimants have to provide evidence. Despite the Government’s rhetoric on people with disabilities and mental health needs, it will be them who suffer. Charities have urged the Government to reconsider, with Mind saying that the regulations will
“make the system harder to navigate at a time when people are unwell and most in need of support.”
Why is the Secretary of State for Work and Pensions ignoring those voices and making the system even harder for the very people the Government claim they want to support?
Self-employed people are the absolute bedrock of our economy. The Chancellor spoke of start-ups and new businesses in his statement earlier, but this legislation will make things harder for self-employed people. The TUC warns that a short start-up period for the minimum income floor could close businesses with the potential to become sustainable and profitable. The rules could discourage people from self-employment entirely. So, again, why is the Secretary of State making things so much harder for the people her Government claim  to support? We know that the self-employed are more likely to be on lower earnings than employees, yet in its recent welfare trends report, the Office for Budget Responsibility confirmed that the low-paid self-employed face a much tougher benefits system under universal credit. On average, those affected are set to lose around £3,000, so the savings seem to be coming from the pockets of the low-paid self-employed. Why is the Secretary of State pursuing a policy that will make so many self-employed people much worse off?
The regulations make the universal credit system even more complicated, with the introduction of the surplus earnings rule. As universal credit is based on the previous month’s income, a self-employed claimant could get substantially less universal credit than an employed claimant earning a similar annual income. Successive Secretaries of State for Work and Pensions have said that universal credit will be simpler and will make work pay, but once again they are proposing the opposite.
All these statutory instruments share a common theme: they are about the support that we offer to families and their children, particularly those already struggling to get by. I remember when the Prime Minister said that the mission of her Government was the acronym JAMs—I am starting to think that really it stood for “Just about May’s survival”. It was meant to be about those who are just about managing, yet under this Government, there will be JAMs today and there will still be JAMs tomorrow, because instead of helping them to get on and get by, the Government are making their lives ever harder. Today is a chance to say that enough is enough. I commend the motions to the House.

Esther McVey: As the hon. Member for Wirral West (Margaret Greenwood) is on the Opposition Front Bench, may I start by congratulating her on her promotion? I am sure that she would have liked to have got it in happier circumstances, but none the less I welcome her to her role. I hope that she does not fall victim to the bullying culture of the Leader of the Opposition’s office, as the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) has.
Well, well, well, what a strange old topsy-turvy world we find ourselves in. Measures so strongly fought for and won by claimants, MPs, stakeholders and charities only months ago are now being opposed by the Opposition. These changes were proposed by the most vocal defenders of benefits, and they are now being obstructed. We in the Chamber should not be giving the public misinformation, but unfortunately that is what has been happening so far.
Last month, stories emerged from Opposition Members—particularly the hon. Member for Ashton-under-Lyne (Angela Rayner)—that have been repeated today: namely, that our plans for entitlement to free school meals would deprive more than a million children. It took a “Channel 4 News” FactCheck to point out that no child who currently receives meals would lose their entitlement and that, in fact, some 50,000 more children would benefit under our proposals when compared with the previous system.
I understand that it is the nature of the Opposition to oppose, but the scaremongering and misinformation from the Opposition has surely reached a new low as today they seek to annul regulations that consist largely of changes that were introduced purely to support benefits claimants—changes that Opposition Members have themselves called for. All this after a recent intervention by the UK Statistics Authority, which made it clear that the claims made by Opposition Members about universal credit causing poverty, debt and eviction were not supported by the evidence.
Of course, the scale and nature of the change represented by universal credit means that scrutiny is inevitable and important, and I welcome that, but unsubstantiated and exaggerated claims about widespread problems caused by universal credit amount to nothing less than scaremongering. They cause claimants alarm and, in the worst cases, stop them getting the money that they are entitled to, yet we find ourselves here again, debating universal credit, with the same false alarms coming from the shadow Cabinet—only this time we are debating the very regulations that we have designed to address the legitimate concerns of Opposition Members and our stakeholders.

Ruth George: The Secretary of State has said that claims should not be made when they are unsubstantiated. I have been asking parliamentary questions about the £50,000 increase that is in the consultation response, and I have received no facts about how the figure has been arrived at—none whatsoever. Will that be published, please?

Esther McVey: The numbers have been calculated and modelled by civil servants. These facts come from independent people and they can be relied on, unlike the facts that come from people who, as we have heard today, make it up as they go along.

Maggie Throup: Will my right hon. Friend dispel some of the myths and scaremongering that have been put out by the Opposition and reassure my constituency, where universal credit is being fully rolled out, that those already in receipt of free school meals will not lose that eligibility?

Esther McVey: My hon. Friend is correct, and I thank her for adding that comment. She is right that that protection is afforded. In addition, as we go forward, more people will benefit from the measure.

Several hon. Members: rose—

Esther McVey: I will carry on for a bit, and then I will gladly take some more interventions.
We are not just debating these regulations today, but trying to save them from the Opposition, who would be happy to destroy this extra support for our benefit claimants. Perhaps I should remind the House of some of the changes that are in these regulations and what benefits they will bring to claimants. After all, the policy underpinning these regulations has been widely debated and supported both inside and outside this Chamber. The regulations abolishing waiting days will help many claimants by, on average, £160, while reducing the time taken to receive the first monthly payment.  These regulations bring into effect the housing benefit transitional payment, which amounts to two weeks of housing benefit at the start of the claim. That is worth, on average, £233 towards helping claimants stay on top of their housing costs as they move into universal credit. These regulations increase the work allowances and are worth around £68 a year in further support for those who are striving to enter work.

Neil Gray: The Secretary of State is attempting to provide a stout defence of the impact of universal credit. Why is it then that, only last month, her colleagues on Stirling Council proposed three years’ worth of mitigation against the impact of universal credit, worth more than half a million pounds?

Esther McVey: Actually, if the hon. Gentleman looks at what this Government introduced in the Budget, he will see that it was a package of support worth £1.5 billion for the country. What we are doing is supporting people as best we possibly can. Additionally, these regulations fund temporary accommodation through housing benefit, which has been widely called for and unanimously welcomed by local authorities.
These regulations follow on from a host of other changes that we have already implemented, including making our telephone lines Freephone numbers, extending the maximum repayment period for advances from six months to a year, increasing the maximum advance that claimants can receive to up to 100%, changing the guidance to ensure that, when private sector housing claimants come on to universal credit, we know whether their rent was previously paid directly to the landlord and can ensure that that continues.

Clive Lewis: Meaner even than the master in Oliver Twist’s workhouse, the Secretary of State seeks not just to stop the second helping, but to stop any meal at all. I ask her to come to Norfolk. If these changes go through, 12,500 children will be denied a hot midday meal. How does that square the circle in relation to making work pay? Please, can she tell us —anything?

Esther McVey: Unfortunately—I think that I was taught this as a child—when someone has totally lost the argument, they make up the facts, and that is what we are hearing from the Opposition. Although we have brought in all the requests that they wanted to support more people into work—I have just read out the list—they just scaremonger and make things up as they go along. I hope that it is clear to the whole House that these regulations will bring in real and tangible benefits for claimants and that, as promised, we are making the changes necessary to continue to deliver universal credit safely and securely, with all the necessary support that claimants need.
I want to be clear about another thing, too, because Members have stood up during past universal credit debates to recount stories of cases where their constituents have reported difficulties with universal credit. Where that has happened, we have immediately sought to address the concerns, because it is vital to us all that we get this right, so that we can deliver the most modern, forward-thinking, flexible benefit in the world, and that is what this Government are seeking to deliver.  This benefit will be at the cutting edge of support throughout the world—that is what this Government are delivering.

Stephen Timms: On problems with universal credit, the Secretary of State will, I think, recognise that the last thing that families earning a bit less than £7,400 a year will want is a pay rise, because if they get it, they will immediately lose their free school meals and be much worse off as a result. That is a very serious problem for work incentives, which used to be a big priority for her Department. Does she recognise that major problem?

Esther McVey: The right hon. Gentleman raises a fair point that I would like to address. By contrast, the other points that we have heard so far have been fabrication. He mentioned people earning £7,400. Actually, with universal credit, we are talking about people who will be bringing home somewhere between £18,000 to £24,000. He is quite right—[Interruption.] If Members will kindly let me finish this answer to the very pertinent question asked by the right hon. Gentleman. As this is now a personalised benefit where people will have their own work coaches, we will not seek to put someone in a less advantageous situation. Therefore, if people look at the money that is coming in and the extra support that is coming from school meals, they can see that we will not seek to do that to an individual. A work coach will be working with individuals to help them to progress in work, so that they are in a better situation.

Chris Philp: On work incentives, can the Secretary of State confirm that there have been two studies—one in December 2015 and another in September 2017—both of which showed that people on universal credit were more likely to get back into work than those people on the predecessor benefits? Therefore, this is helping to get people back into work.

Esther McVey: My hon. Friend is quite correct. Further studies show that people on universal credit are much more likely to look for work than people on jobseeker’s allowance—86% of those on universal credit, compared to 34% of those on jobseeker’s allowance. Under the legacy benefits came things that I am sure we all remember, such as the 16-hour rule, which trapped people on benefits. That will not happen under universal credit because it pays people to work, every hour that they work.

Iain Duncan Smith: My right hon. Friend is doing a fantastic job. She has pointed out the absurdity of the Opposition’s position, whereby they will now vote against the changes that will benefit those who most need them. Alongside that, they are now voting for a policy that would deliver free schools meals to families earning £40,000 a year. Does not she think that the Opposition are for the few, not for the many?

Esther McVey: My right hon. Friend makes a very good point. Perhaps these are honest mistakes by the Opposition; I am not sure. Under universal credit, people can be in work and not in work. Perhaps the Opposition do not understand the complexities of this system, which is helping people into work and then to progress at work. As my right hon. Friend said, if we allowed free school meals in every family on universal credit, those families  could include parents earning £40,000 a year. As has always been the case, we support people on free school meals from families who are either not in work or in low amounts of work.

Several hon. Members: rose—

Rosie Winterton: Order. Again, can we listen to the Secretary of State? It is fine if she wants to take interventions and she has indicated that she will take some more, but I do think that hon. Members should be a bit calmer.

Esther McVey: I will give way to my hon. Friend the Member for Faversham and Mid Kent (Helen Whately).

Helen Whately: Jobcentres in my constituency tell me with some passion that universal credit is really helping them to get more people into work. The Government have also listened to concerns about universal credit and are making improvements. Does it not baffle the Secretary of State and is it not bizarre that the Labour party is trying to block those improvements, when the Government are doing exactly the right thing?

Esther McVey: My hon. Friend is spot on, and the incredulity with which she says what the Opposition are stopping points out the ridiculousness of their position. Not only have we helped an extra 3.1 million people into work, but these regulations help the most vulnerable and will bring in an extra £1.5 billion of support.

Several hon. Members: rose—

Esther McVey: I will carry on for a little bit more before taking more interventions from Opposition Members.
I turn to the Free School Lunches and Milk, and School and Early Years Finance (Amendments Relating to Universal Credit) (England) Regulations 2018. The Government have recently published their responses to two consultations on the earnings thresholds to receive free school meals under universal credit. The scope of these consultations includes entitlement to free school meals, the early years pupil premium and free early education provision for two-year-olds. The intention of these regulations is to replace the transitional criteria introduced in 2013. These transitional measures made all families on universal credit eligible for these entitlements—a move that was necessary so that no household should lose out during the early stages of the universal credit roll-out. Having fully considered all the responses to the consultation, the Department for Education laid these regulations before the House on 7 February to replace the temporary criteria with the new earnings threshold. This is what much of the debate has centred on so far. I hope that we have given clarity and the Opposition now understand why accepting these regulations would be so helpful to their constituents.

Catherine West: This change to benefits shows how untrusted the Government are on benefits. If they are trying to sell something good, they cannot, because they are so untrusted on benefits. If the system is so fantastic, why do 80% of people who come to see MPs  get their benefits? Why should not the system just work? [Hon. Members: “What?”] Some 80% of appeals for universal credit—

Lindsay Hoyle: Order. May I help a little bit? Would hon. Members make short interventions? I want to ensure that all Members get in. The sooner we get this speech over, the sooner we can get to the Back Benchers.

Esther McVey: It would be helpful if hon. Members did not just make up statistics and facts as they went along, as we just heard from the hon. Lady. Hon. Members should listen to us regarding the support that we are now providing to claimants. As I said, it is a topsy-turvy world. There was a ding-dong when the Opposition were calling for the changes. Now that we are introducing the changes, we are back to another ding-dong and they do not want the changes—but never mind.
I turn to the regulations concerning national insurance contributions and childcare. These regulations align the tax and national insurance treatment of employer-supported childcare, where parents opt into the new tax-free childcare scheme. They remove the national insurance disregard to new entrants to the scheme, once the relevant day has been set. They are vital to ensure that the tax system operates fairly and consistently and that the Government can target their childcare support effectively.
For many parents, being able to afford good-quality childcare is essential for them to work and support their families. That is why we are replacing the childcare vouchers with tax-free childcare, which is a fairer and better-targeted system. Tax-free childcare is now open to all eligible parents, who can get up to £2,000 per child per year to help towards their childcare costs. More families will be able to access support through tax-free childcare because only about half of employed working parents can access vouchers, and self-employed parents were excluded from vouchers. Therefore, 1.5 million families are now eligible for tax-free childcare compared with about 600,000 families currently benefiting from vouchers.

Ivan Lewis: Will the Secretary of State clarify something she said in relation to people getting pay increases that then perversely lead to them being worse off? She appeared to say that she would instruct personal trainers to put that right financially. I can hear a shudder going around benefits offices up and down the country at the idea that she has unilaterally said that if any constituent of ours faces being worse off as a consequence of a pay rise, perversely, her personal trainers will compensate them for that loss.

Esther McVey: I thank the hon. Gentleman for that intervention, because it allows me to explain that universal credit works on a tailor-made basis, so that the claimant will always be in contact with their work coaches to work out what is better, how progression would be better and why they would be taking reasonable work because it makes them better off. I am not saying this unilaterally. I ask all Opposition Members please to go to their local jobcentre and meet the work coaches, who can then explain how the system works.
In 2013, the Government announced the introduction of tax-free childcare as the successor to childcare vouchers. The passing of the Children and Families Act 2014,  which legislated for tax-free childcare, had cross-party support. Tax-free childcare is now fully rolled out, and the date for the closure of the voucher scheme to new entrants is April this year. This was set out in the 2016 Budget, giving two years’ notice. Parents receiving childcare vouchers can continue to use them while their current employer continues to offer the scheme.

Marcus Jones: Is not the bottom line that under the previous tax credits system people got 75% of their childcare costs but under universal credit they get 85% of their childcare costs, and they can work all the hours that they want to?

Esther McVey: Universal credit is far more generous, as my hon. Friend points out. Up to 85% of childcare costs will be given to people who need it.
Under the childcare voucher scheme, the estimated cost to the Exchequer of forgone employers’ national insurance contributions is £220 million per year. This is paid to employers and voucher providers to administer the schemes, so it is not surprising that voucher providers are lobbying hard to keep the scheme open. However, we are focused on delivering a better childcare offer for working families. Tax-free childcare is simpler to administer for childcare providers, who will not have to deal with multiple voucher providers. These regulations will bring the national insurance contributions relief in line with the income tax treatment. They are an essential step in reforming Government childcare support to provide a fair and well-targeted system. Closing the childcare voucher scheme to new entrants will ensure that more Government support goes directly to parents and helps working families to reduce their childcare costs.

Philippa Whitford: With the consultation that the Government are carrying out on abuse of women, does the Secretary of State recognise the threat of financial control and abuse posed to women by the single payment? Would she be willing to consider making individual payments of child tax credits to the mother, and so on, the norm? Charities have demonstrated that women who are being abused will not apply for exception because they feel they will come under physical abuse.

Esther McVey: The hon. Lady makes a good point, and that is why it is possible to split payments according to need. The devolved Administration in Scotland have the right to alter these rules and provide extra support, should they wish to, but it is safe to say that payments can now be split, and we have listened to those concerns.
We are also listening to colleagues in Northern Ireland, who have raised specific circumstances relating to certain public sector service employers, and have committed to ongoing engagement with them to look at these issues, as tax-free childcare continues to roll out to replace employer-supported childcare. We have seen the success of 30 hours’ free childcare for three and four-year-olds in England, so we are committed to working with the Northern Ireland parties to administer childcare support of that kind in Northern Ireland, in the absence of an Executive.
For the reasons I have set out, annulling these regulations would deprive families and their children of the important  and positive support that this Government are determined to offer and would have a range of very negative effects, so I call upon the House to oppose the motions.

Neil Gray: I am grateful for the opportunity to speak to these motions for the Scottish National party. I will use the bulk of my time on early-day motions 1004 and 921, as the other two relate only to England or England and Wales.
The universal credit regulations referred to in early-day motion 921 cover most of what was announced in the Chancellor’s autumn Budget, after months of negative headlines for the Government about universal credit. It was the Government’s big sell to their concerned Back Benchers, which was really not much. For instance, they reduced the waiting time before universal credit can be paid to recipients from six weeks to five, which was a welcome but very wee step.
Meanwhile, the Government also included more controversial measures such as changes to the rules on surplus earnings and self-employment losses, which come into force next month. They removed the automatic temporary exemption from work search and availability requirements for illness for claimants who have been found fit for work, and they reduced the time people have to register and supply evidence regarding a change in their circumstances from one month to 14 days.
The Government’s tweaks to the welfare system over the last eight years and the drip, drip, drip of cuts are slowly eroding the value and support it provides. It is completely unfair to expect people on low incomes to cope with the fact that their benefit will be frozen and fail to meet their costs of living, while the Government continue to add layers of punitive bureaucracy designed to trip them up. An individual financial sanction or one person missing the deadline for an increase in entitlement is of tiny financial value to the Department for Work and Pensions, but it is proportionally an enormous chunk of that person’s income. Yet this Government seem content to make these changes off the cuff, in the same way they tweaked the universal credit work allowance, which eroded its value, and the same way they tried to tweak personal independence payments, to stop people with severe mental health problems receiving the higher rate. It is underhand, and it is appalling.
I received an official warning recently that universal credit will be rolled out in my constituency next month. I have been working closely with my local citizens advice bureau to make sure there is a joined-up response to the issues as they unfold, as it has done in many Members’ constituencies. I am worried about the impact that the roll-out of universal credit will have on local employers and their employees, because the picture elsewhere has been disastrous. The continued roll-out of universal credit is having a devastating impact on claimants, with debt and rent arrears through the roof.

Rachel Maclean: The hon. Gentleman is speaking about the roll-out of universal credit. We had the roll-out in Redditch just a few months ago. I can assure him that, according to the manager of the jobcentre, who has worked there for 30 years—an independent person working day in, day out to help people—the roll-out is much better than any previous system. Maybe he would like to visit Redditch and speak to her.

Neil Gray: I have no reason to doubt what the hon. Lady says, except that the experiences of Members on the Opposition Benches are rather different. I point her and her colleagues to my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), who has been working tirelessly on this not only while he has been a Member of the House but while he was leader of Highland Council, when universal credit was first tested in Highland. He has been knocking against a brick wall trying to get the DWP to listen to the concerns that he has found in his area, and his experience is not the same as the one the hon. Lady says she has had in Redditch.

David Linden: I intervene in response to the hon. Member for Redditch (Rachel Maclean), who said how wonderful jobcentres are and how much work they do. I do not know whether she has had the same experience as me, but in my city of Glasgow, the UK Government have closed six jobcentres, and in my area of the east end of Glasgow, they have just butchered three out of four jobcentres. How can we go and find out how things are going in jobcentres, when her Government are busy closing them?

Neil Gray: I absolutely concur with my hon. Friend, who has been an assiduous campaigner to protect and save the jobcentres in his constituency. Even at this late stage and after some of their doors have closed, I hope that the Government may listen and finally provide a reprieve.
It is right that we acknowledge the knock-on effect felt by landlords, whose incomes are in turn being squeezed due to tenants falling into arrears because of successive cuts to universal credit. The SNP has continually called for the roll-out of universal credit to be paused and properly fixed. That is not just about reducing the wait time by a week for those receiving universal credit, but about restoring the original principles of universal credit, which have been cut back so far to their roots that they have been battered.
The UK Government’s woeful ignorance on this is shameful. The evidence of the social destruction caused by universal credit in its current form is clear from report after report by expert charities. Such social destruction is not masked by the line, repeated ad nauseam by the Government, that universal credit is getting people into work. It is not much good for people if this is just a shift from out-of-work poverty to in-work poverty. We know there has been a rise in the rate of in-work poverty, and we also know that 67% of children—I repeat, 67% of children—currently living in poverty do so in a family where at least one person works.

Catherine West: Does the hon. Gentleman agree that most housing providers have deep concerns about universal credit in general, and in particular about direct payments to tenants who have problems with such a relationship?

Lindsay Hoyle: I just warn Members that we will have to have a five-minute limit. I do not want to start off with a four-minute limit, but we are in danger of going that way.

Neil Gray: I agree with the hon. Lady, which is why we are looking to introduce some flexibilities in Scotland, where we have the minimal powers to do so.
The Government must open their eyes to the crisis that they have created for workers, people who are sick or disabled, landlords and tenants, and employers, and urgently halt and fix universal credit before any more of our constituents have to suffer. In Scotland, the Scottish Government are using some of their minimal new powers in this area to give people in Scotland more choice over the universal credit payments and enable them to manage their household budgets better. We of course want to do more, and we wish that the whole of universal credit had been devolved to allow us to do so.

Philippa Whitford: Does my hon. Friend agree that the Secretary of State’s suggestion that women can apply for the exceptional alternative payment scheme is not enough? The evidence shows that this needs to be the norm.

Neil Gray: I fully agree with my hon. Friend. Again, I hope that the Government are looking at her private Member’s Bill, which is due to be given a Second Reading on Friday, and that they will do what is right and is needed so that all areas of these isles can bring about the changes that are required.
Turning now to early-day motion 1004 on the changes to national insurance contributions that come into force on 6 April, much of the comment in this area has been not about the regulations themselves, but about a policy underpinning one of the changes. That policy is the UK Government’s decision to introduce a new scheme to support parents’ childcare costs—tax-free childcare—and to close employer-supported childcare schemes to new applicants from April 2018. Parents will not be able to receive support simultaneously from both the current scheme and the new tax-free childcare scheme, but parents who wish to remain in the old childcare vouchers scheme will be able to do so while the current employer continues to offer such a scheme. There is no obligation to switch to the new scheme, but existing voucher schemes will be closed to new applicants from next month.
The delivery of affordable childcare is crucial for the development of children as well as for providing for families. Fundamental to that is that parents on low incomes need to be protected from the impact of enormous childcare costs. That is one of the major barriers to resolving the gender pay gap and the gender employment gap. Childcare continues to be expensive and inflexible.
We are deeply concerned about the UK Government’s plans to close the childcare voucher scheme to new entrants from April this year. The SNP wishes to support policies that deliver for parents, ensuring that they have the resources and flexibility they need to give their children the best start in life. The UK Government must support working parents by keeping the scheme going, alongside the tax-free childcare scheme, so that parents can choose what is most suitable for their needs and offers the most support for their family. We must also consider in more detail the impact that the introduction of tax-free childcare will have across all different family types.
One of the key problems is that this is an extremely complex area, and the interaction of two schemes with the benefits system is an additional layer of complicated bureaucracy for parents. For example, the Low Incomes Tax Reform Group highlighted in February that universal credit and tax credit claimants must seek advice before applying for tax-free childcare:
“If an existing tax credit claimant makes a claim for TFC, even if they do not claim any help with childcare costs through tax credits, their whole tax credit claim will be automatically terminated. If they live in an area where universal credit full service has rolled out they may find that they are not able to claim tax credits again and this is very confusing.”
That is a significant issue with the new scheme, so how are the Government making people aware of it? We know that the DWP is notoriously bad at awareness campaigns, as we have seen with the WASPI women—Women Against State Pension Inequality Campaign—or the massively under-marketed Access to Work programme. We also know that the UK Government’s benefit changes are already creating confusion for people. Figures from the Government Digital Service have revealed that claimants appear to be encountering significant problems with the Government’s Verify system for universal credit, with 48 out of 91 needing help at a jobcentre to set up an account.
In Scotland, the SNP Government have committed to almost doubling the funded early learning and childcare entitlement by 2020, from 600 to 1,140 hours, in a bid to transform the life chances of children in Scotland. Our universal childcare offer is unmatched in the rest of the UK. In Scotland, all three and four-year-olds, and eligible two-year-olds, will benefit from 1,140 hours. The full entitlement is estimated to save families over £350 per child per month, or £4,500 a year.
Before I conclude, I would like to touch briefly on the other two motions, which relate to devolved matters. On the free school lunches and milk motion, every child at a local council school in Scotland can get free school lunches in primary 1, 2 and 3, regardless of financial circumstances. Some children in funded childcare before starting school can also get free meals. That is a year more than is currently provided in England. The UK Government’s universal credit system requires arbitrary thresholds, which create a cliff edge for parents, as has been discussed. We continue to call on the UK Government to devolve powers and funding so that we can take control of universal credit in its entirety in Scotland and deliver it in the best way possible for the people of Scotland.
Finally, on the free childcare motion, we have committed to fully funding our transformative expansion of early learning and childcare entitlement to 1,140 hours by 2020, and we have a track record of delivering on the previous expansion from 475 hours to 600 hours.
In conclusion, in all these areas what is clear is that when issues are devolved we see better policy and better outcomes for the people of Scotland.

Several hon. Members: rose—

Lindsay Hoyle: Order. There is now a five-minute limit on speeches.

Marcus Jones: I welcome the universal credit regulations that the House is considering. We should not forget that universal credit is an important reform that is getting more people back into work and helping them to stay in work. People are getting help and support from DWP staff that they did not get in the past.
I think that a mark of the policy is the enthusiasm shown by jobcentre staff. I had the privilege of visiting my local jobcentre in 2014—I have visited it since, of course—alongside my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith). That day they were holding a regional training conference for up-and-coming leaders, and when we walked into their training room, which was full of civil servants, they all immediately started applauding my right hon. Friend. That showed me that they do not owe any Government anything, in terms of support or loyalty. It showed me that they think the reforms that he was introducing, and that the Government are now rolling out, are worth doing. Having visited the people who work in jobcentres, and having spoken to them since, it is clear to me that they think that the reforms are now making a real and positive difference.
I will not say that the roll-out of universal credit has been without challenges. We all know it has, which is why the Government are putting forward this package today worth £1.5 billion. We should also acknowledge that if the package is voted down, people who need help might not be able to receive their advance within five weeks or get the extra six months to repay any advance, and they might have to go back to seven weeks of waiting time while their claim is processed. My right hon. Friend the Secretary of State also raised the possibility of people being in a worse position with regard to housing benefit. The House therefore needs to think very carefully before voting down these regulations, which are positive and are what Opposition Members wanted just a few months ago.
On free school meals, it is important to point out that the regulations we are debating today do not change the entitlement for year 1 and 2 children, all of whom receive free school meals. We also need to be careful with the figure of 1 million children losing out. As soon as I heard that figure—on that same afternoon—I accosted the Education Minister during a vote to ask him whether it was true. He said clearly that it was not true, so we need to look at the facts.

Alec Shelbrooke: My hon. Friend will recognise that the Opposition’s proposal on free school meals in their manifesto was to pay for them by charging VAT on private schools, which is illegal under EU law. Does my hon. Friend find it confusing that they would prefer to stay in the single market and the customs union, when that would be at odds with that policy?

Marcus Jones: My hon. Friend demonstrates the complete confusion and disarray of the Opposition, not just on this policy but on our future outside the European Union. That goes to the heart of the situation: this is all about political dogma, rather than practical ideas and practical help for people.

Mike Amesbury: Does the hon. Gentleman think that the Children’s Society’s figure of 16,500 children being denied free school meals in the county of Cheshire, which the Secretary of State and I represent, is political dogma?

Marcus Jones: The new system is more generous than the old system. I will come on to the external evidence that explains that in a moment.
Returning to what I was saying about free school meals, under the old system of jobseeker’s allowance as soon as a parent worked 16 hours, or two parents worked 24 hours, they lost their children’s entitlement to free school meals. The crux of this debate is comparing and contrasting that with what we are moving to. All those currently in the system have been eligible, because of transitional arrangements. Conservative Members have made it clear why the transitional arrangements were put in place. Under the new system, when everybody is on universal credit and these regulations are in place, by 2022 an additional 50,000 children will be eligible for free school meals. I hear all the noise from Opposition Members, but they should not just take my word for it or that of other Conservative Members. They should go on to the “Channel 4 News” FactCheck website, which says:
“This is not a case of the government taking free school meals from a million children who are currently receiving them: it’s about comparing two future, hypothetical scenarios. Both of them are more generous than the old benefits system.”
The Labour party frequently looks for us to improve the situation and the lives of the most vulnerable. That is what this policy and these regulations are doing today, but unfortunately, Labour seems not to let the truth and the facts get in the way of a good story. There is too much political dogma and it is putting that before people. The Government are putting people first. This system will be better than the system was hitherto and that is why I will support the Government tonight.

Ivan Lewis: The measures that we are debating expose what has been happening to our country since 2010. In the name of deficit reduction and fiscal responsibility, the Tories have allowed the poorest and most vulnerable to become poorer and even more vulnerable. A Prime Minister who once courageously warned her own party that it was perceived by too many as the nasty party is presiding over a Government who have a cavalier disregard for social justice and the poverty that shames our country.
It is true that in the aftermath of a global financial crisis, any UK Government would have had to make tough choices, striking the right balance between spending cuts, tax increases and investment in growth. However, the reality is that too often they have made the wrong choices—choices motivated by an ideological project to wither the state, irrespective of its impact on local communities, the poorest in our society and growth.

Anna Soubry: Could the hon. Gentleman just remind us all that a note had been left by a member of his Government that said, quite properly, there was no money left? Not only have this Government restored our economy, but in so doing they have absolutely protected the very people that matter to all of us. This is tribal nonsense.

Ivan Lewis: I have a lot of respect for the right hon. Lady, but to claim that the financial crisis was anything other than a consequence of a crash that started on Wall Street is the biggest distortion of history that we listen to in this country.

Anna Soubry: The hon. Gentleman is rewriting history. The fact is that if the Labour Government had fixed the roof when the sun was shining, when that crisis came along they could have weathered the storm. That is what this responsible Government have been doing since 2010.

Ivan Lewis: The right hon. Lady’s party wanted us to regulate the banks and the financial services sector less than under the regulatory system we had in place. It committed to matching our spending and borrowing and did not want us to rescue the banks. Imagine if that prescription had been followed at the time we were dealing with the financial crisis.
The Government’s choices are motivated by an ideological project to wither the state, irrespective of its impact. Their disproportionate cuts have choked off growth and destroyed too much of our social fabric. Their tax changes have failed dismally to tackle tax avoidance or to ensure that, in tough times, those with the most carry the greatest burden. Their failure to invest in infrastructure, skills and jobs has led to economic growth that is anaemic compared with similar economies. The Government’s own assessments predict that this economic failure will be made even worse by the uncertainty and instability that are the inevitable consequences of Brexit.
Perhaps right the hon. Lady will agree with me on this point: history will record that the referendum was nothing to do with the national interest or giving voice to the will of the people. It was David Cameron’s fix for managing the Tory party through a general election.

Anna Soubry: Will the hon. Gentleman give way?

Ivan Lewis: I am not giving way again to the right hon. Lady. Far from being the party of economic competence, hers is the party of economic chaos.
To be clear, the policies we are opposing today are neither necessary nor acceptable in a civilised society; they are political choices made by this Tory Government. As we have heard in this debate, Tory Members are in denial. Too many of our fellow citizens might as well be living in a different country from the one they describe. The reality for those people is food banks, perpetual debt, a poor quality of life and a lack of hope for themselves and their children. Some, of course, are dependent on benefits, but increasing numbers are people in work on permanent low pay and insecure contracts. This should offend any Member who believes not only in social justice but in the future of mainstream politics. Here and abroad, people who feel left behind by mainstream politics are increasingly turning to anti-establishment nationalism, which spreads hate and division. That is another reason these policies are so irresponsible.

Simon Clarke: A few moments ago, the hon. Gentleman denigrated Brexit, yet his own area of Bury voted to leave the EU. How would that have helped with the politics of disenfranchising people and making them turn towards extremes?

Ivan Lewis: The hon. Gentleman entirely misses the point. Of course I believe that the result of the referendum must be respected; I question the motive for the referendum  in the first place. It was David Cameron’s folly—that is how history will remember him—and was done in the interests of the Conservative party, not those of our country.

Anna Soubry: I too have respect—some—for the hon. Gentleman, although it is beginning to wane. I do not want to fall out with him, but I would make one point to him. It is not good enough just to blame it all on David Cameron. The hon. Gentleman, like me and the majority of people in the House, walked through the Lobbies in support of a referendum, and we are now dealing with the consequences. We were all complicit in agreeing that the British people should vote and determine whether we stayed or left.

Ivan Lewis: I simply say—I think that history will bear this out—that it was done purely to keep the Conservative party together and to get through a general election. It had nothing to do with the national interest and everything to do with the arrogance of the then Prime Minister and Chancellor in believing that they would almost inevitably win such a referendum.
I will turn now to the measures on universal credit and free school meals. The Government could hardly have made more of a mess universal credit. The National Audit Office stated that the project had suffered from
“weak management, ineffective control and poor governance”.
Is that the responsibility of the current Secretary of State or her predecessor? Perhaps she would like to respond—no? Okay. Cuts to universal credit passed in the last two years have left a majority of families worse off on universal credit than under the system it replaces, and this further reduction in support will add to their financial pain. The proposed threshold could have a negative effect on work incentives and risks creating poverty traps for families on universal credit, which goes completely against the Government’s goal that universal credit should always reward work.
In the 1980s, Tory policies created a deeply divided society. They have learnt nothing from history and are once again fuelling a cycle of intergenerational deprivation that hurts those most affected but which in the end damages us all. I hope the House will today force the Government to rethink these regressive measures.

Mark Menzies: I do not approach the matters in the statutory instruments lightly, and I will tell hon. Members why. I was brought up by a single parent who was widowed a month before I was born, who worked shifts in a factory and who got by on a widow’s pension, child benefit and the money she made and by managing that money carefully, so I know only too well the impact that such changes can have. But I also know that people in those situations are acutely concerned about changes coming down the line and the alarmist things being said currently. I appeal to the Opposition, particularly the Front-Bench team, to think of those people when they make alarmist statements. By all means have legitimate, fair and open debate, but do not trot out numbers that are simply not true; do not let people believe that something as precious as free school meals is being taken away from them when that is not the case. I ask those on our Front Bench whether these changes remotely resemble what has been proposed  by Labour Front Benchers. They are not changes that I could support, but they are nothing like what Labour is proposing.
I thank the Secretary of State for Education for his letter outlining the Government’s position on free school meals. In it, he states:
“The proposed changes to the eligibility criteria have been designed to ensure that support is targeted where it is needed most, meaning that those on the lowest incomes remain the focus of Free School Meals…
No child will lose their meals during the rollout of Universal credit as a result of these changes.
Our plans mean an extra 50,000 children will be eligible for a nutritious meal at school by 2022.
Labour’s claim that our changes could leave over a million children without this is deliberately misleading.”
As I have said, there are people out there in the real world who think that something will be taken from them and their children, which causes them concern and alarm. I question whether there is a deliberate attempt to weaponise the vulnerable, just as people once boasted about the NHS being weaponised in order to rig votes. I urge Members not to do that, because they will cause fear and anxiety where it is not required. There is enough fear and anxiety in those households as it is.
The letter continues:
“Since 2010, we have extended the availability for free school meals to disadvantaged students in further education and introduced universal infant free school meals.
When Universal Credit was introduced, the Government were clear that they would set a new criteria for free school meals. To ensure that no one was adversely affected during its roll out, the Government temporarily made Universal Credit a qualifying benefit for Free School Meals, regardless of income. As was made clear at the time, this was always an interim measure…
If you receive a free school meal now—you will continue to do so until the end of the rollout of Universal Credit, planned for 2022, and then to the end of either primary or secondary school (which ever you are in at this point).
For example a child in year 5 on a FSM now, whose parents are on UC but have an income of £40,000, will continue to get a FSM until the end of secondary school.”
I know that many colleagues want to take part in the debate, but I particularly want to thank the Government Front Bench for a robust defence of an important policy. Let us nail the myths, the untruths and the attempts to frighten people. If the Labour party continues to peddle things that are untrue, it behoves us to state what is true and not to frighten the vulnerable, many of whom we are all proud to represent.

Lucy Powell: I have been raising these issues in the Chamber for a number of years. Why is that? First, those we are talking about today, whether they are above or below the arbitrary thresholds that the Government are setting, are by their nature very low-income families who are struggling every day to get by. Secondly, the whole point of universal credit was to remove cliff edges from the system, so that once people reached a certain point they would not suddenly lose a number of benefits that make quite a significant difference to a “just about managing” family. Those arbitrary thresholds are taking away the very principles of that position.
I recently spoke to a number of parents in Moss Side, in my constituency, about their predicament. Those who had lost free school meals described acutely what it  meant to them. Some had two, three or four children, which meant that they were losing £10 or £11 a week per child. Moreover, they were losing bus passes, the entitlement to free school uniforms and the entitlement to free school trips. What were they doing? They were not going to pay that £10 or £11 to the school for free school meals, so most of them were sending their children to school with white-bread jam sandwiches to last them for the entire day. That is not something I want to see happening in my constituency.
The need of these families has not changed; they are still on the breadline—they might be just above it, but they are still absolutely operating on the breadline. The impact of losing the two-year-old offer for these families could mean about £54 a week is suddenly gone because of this cliff-edge. For those with children aged two this is particularly pernicious, because we are probably talking about young mums who are re-entering the labour market for the first time, and we are disincentivising them from working. The real problem with the Government’s policy is that it breaks the principle of universal credit: it is putting into the system disincentives to work more or take on higher paid work for, by their definition, low income, just-about-managing families.
My wider point is about the impact of these policies on social mobility and supporting these families to get on in life. The mothers I spoke to in Moss Side also had the school headteacher there, and she told me about the impact of the loss of free school meals on her school budget. This is a single-form entry primary school in Moss Side where the needs of the community are the same today as they have ever been. About 25 out of 30 children in year six are on free school meals, and coming in from nursery are about four or five; that is because of changes already coming in. We must remember that this has a huge impact on school budgets as well, because of the loss of the pupil premium.
I want to talk particularly about the developmental gap at the age of five and the impact of this particularly stringent new threshold on receiving the two-year-old offer. I fully supported the Government in bringing in the two-year-old offer for disadvantaged families, and we know from the evaluation that where that is given in a quality setting it can transform the life chances of those children, so surely we should be debating how we can extend that provision for more disadvantaged families, not reducing it.
Analysis I produced last year showed that many of the tax-free childcare offers and the three and four-year-old offer coming in disproportionately benefit better-off families: 75% of that extra money going into tax-free offers, and the three and four-year-old offer will go to the top 50% of earners in this country. Lower-income families and those on universal credit will reap very little benefit from these other offers. We are therefore going to see lack of social mobility getting entrenched, not being addressed.
I will leave everybody with the words of the Prime Minister, who said that to
“build a great meritocracy in Britain, we need to broaden our perspective and do more for the hidden disadvantaged”.
These new measures will narrow the current provisions, not broaden them.

Several hon. Members: rose—

Lindsay Hoyle: Order. The time limit is now four minutes.

Edward Argar: We are debating a number of important statutory instruments, and in the light of the time constraints, I will confine my comments to the measures relating to free school meals.
The benefits of free school meals for those who need them have been set out today and in the past. While it is absolutely right that we debate these new eligibility criteria for free school meals, although it is disappointing that there are no Liberal Democrats in the Chamber, it is also right that we do so with a focus on facts, not inaccurate claims—the Secretary of State made the position clear—that these proposals take away free school meals from children. In fact, as has been set out, it is estimated that by 2022, under the new regulations, about 50,000 more children—more, not fewer—will benefit from a free school meal than under the previous benefit system.
The approach in these regulations not only extends support to more children, but ensures, as my hon. Friend the Member for Fylde (Mark Menzies) made clear, that we target that support at those who most need it and where it will have the greatest impact in changing lives. As he also set out, the Government have always been open and clear that when universal credit was rolled out, there would be new criteria, but that no child currently on free school meals would lose out until 2022, and that those in either primary or secondary school would continue to benefit while in that school.
Much is being made of claims that 1 million children will have free school meals taken from them, but that is simply not accurate. I am not usually one to cite “Channel 4 News”, but on this occasion, like my hon. Friend the Member for Croydon South (Chris Philp), I will quote its FactCheck verdict, which reads:
“This is not a case of the government taking free school meals from a million children who are currently receiving them. It’s about comparing two future, hypothetical scenarios, one of which is more generous than the other.”
Both of them are more generous than the old benefits system.

Ben Bradley: Will my hon. Friend give way?

Edward Argar: I will not, because I am conscious of the time.
An issue such as this, which is of real importance to many people, quite rightly excites strong passions and strong arguments, but it is important that we stick to the facts. An Opposition who are unable to muster coherent arguments against actual Government policy are instead taking issue with hypothetical Government policy and scenarios. I am committed to ensuring that disadvantaged young people can get a free nutritious meal at school, and I am sure that that is true of all colleagues on both sides of the House, regardless of where they stand on these two hypothetical scenarios. These measures mean that more people will be able to  get free school meals than at present, which is why I will be voting with the Government to extend the eligibility for free school meals.

Sharon Hodgson: These regulations will affect millions of families up and down the country, so it is only right that we are able to discuss them today. The Government consulted from November to January on introducing an earnings threshold that would restrict free school meals to families with net earnings under £7,400 per annum. The consultation received 8,981 responses. However, the Government excluded 8,421 of those responses from their analysis, meaning that fewer than 4% of respondents agreed with the Government. Surely that goes against every rule of public consultations. Talk about statistics being used against vulnerable people!
In 2010, the then Secretary of State for Work and Pensions promised in the White Paper on universal credit that it would
“ensure that work always pays and is seen to pay. Universal Credit will mean that people will be consistently and transparently better off for each hour they work and every pound they earn.”

Stephen Timms: I am glad that my hon. Friend has picked out that point. She will have heard the Secretary of State saying that jobcentres would advise people not to take extra work or to get a pay rise because they would end up worse off. Is that not absolutely contrary to the whole principle of universal credit that she has just read out?

Sharon Hodgson: Yes, absolutely. We know that the Government are today reneging on the former Secretary of State’s commitment.
Free school meals are worth far more to a family than £400 a year per child. That might not seem to be a lot to some hon. Members, but to those families it is an absolute lifeline. By introducing a £7,400 threshold for eligibility, the Government are forcibly creating a cliff edge that will be detrimental to families, especially children. To give just one example, someone with three children in their family who earns just below the £7,400 threshold is set to lose out on £1,200-worth of free school meals if they work only a few extra hours or get a pay rise. The Opposition’s proposal would simply remove the huge cliff edge and the work disincentive for families who most need support. It would take away the barrier to working extra hours or seeking promotion. Our proposals would therefore make work pay. The Government’s proposal is in fact the new 16 hours, which they said was a disincentive.

Mike Hill: Is my hon. Friend aware that in Hartlepool, where universal credit is not being rolled out—it is already in—more than 1,000 children are being denied free school meals on the basis of the new proposal?

Sharon Hodgson: Yes. We can all cite the numbers from our constituencies. Even Conservative Members need to think about what they are doing to some of the poorest children in their constituencies. In the example I just quoted, the family’s annual wages would need to increase from £7,400 to almost £11,000 to make up for  what they would lose by rising above the eligibility cliff edge. That problem did not occur under the old tax credit system, because that provided an offsetting income boost at the point at which free school meals were withdrawn. However, there is no equivalent mitigation under universal credit.
The Children’s Society has been much maligned today and has been cited as giving duff statistics—Conservative Members should be ashamed of themselves. It estimates that the cliff edge will mean that a million children in poverty will miss out on free school meals once universal credit is fully rolled out. They will miss out on something that is crucial for their physical and mental development.
The Government have said that 50,000 more children will benefit by the end of the roll-out in 2022, when the transitional protections are at capacity, but I and many others struggle to understand how that can be the case. Parliamentary questions tabled by my hon. Friends and others have gone unanswered, and the Government cannot just pluck figures out of the air, as they claim so many others have done. At least we can back up our claims with evidence from the Children’s Society, Gingerbread, the Child Poverty Action Group and Citizens Advice, all of which agree that this statutory instrument would take free school meals away from a million future children—[Interruption.] It would. If the SI does not come into force, a million more children will receive free school meals—[Interruption.] Conservative Members can shake their heads all they like.
During my recent Westminster Hall debate, I offered Ministers a solution that would mean that all children in universal credit households would continue to receive free school meals. As somebody asked earlier, I can say that it would cost half a billion pounds—not a huge cost to feed over a million of the poorest children. My proposal would see around 1.1 million more children in years 3 and above from low-income families receiving free school meals compared with under this change.

Heidi Allen: If we were to maintain free school meals for absolutely everybody on universal credit, does the hon. Lady think it would be right to prioritise those coming from the legacy tax credit system, who could be earning up to £50,000 a year, instead of opening up eligibility and getting free school meals to more children in poverty?

Sharon Hodgson: I am running out of time, so— [Interruption.] Perhaps Conservative Members would let me finish before they use up all my time. I was going to say that while I cannot go into the full details, because of the time, I understand from the Children’s Society that a small number of people are getting up to £40,000. Those people are in large families with severely disabled children. The large amount of money is down to how much they receive for those children. It is disingenuous to use that as an example and to make out that all those families are receiving that amount.
The Minister claimed yesterday that my proposal would result in around half of all pupils becoming eligible, increasing the figure to 3.3 million children. Even the much-cited Channel 4 FactCheck article states that our proposal would extend to 1.1 million children, making the total 1.8 million children. When we talk about facts, Conservative Members need to get their facts right. Where do the extra 1.5 million children come from?

Heidi Allen: Opposition Members know that I have been the first to stand up and challenge the Government on universal credit, and the Government have listened. First, at the 2016 autumn statement, we reduced the taper rate from 65% to 63%, which cost the country £700 million but put around £300 into families’ pockets. Secondly, I worked with the Government at the end of last year to secure £1.5 billion of comprehensive improvements: two weeks’ extra housing benefit for those transitioning on to universal credit with housing payments; double the advance payment and twice as long to pay it back; direct payments to landlords; and a slowed-down roll-out. Those were all things that the Opposition asked for, so I am staggered that they are asking us to vote against them today.
For the past two years, I have worked not only with my colleagues, but proudly on a cross-party basis to achieve those improvements. Today is a big wake-up call. These motions are not about improving universal credit, but simply about playing politics. I have seen that for the first time. The Government have taken the time to understand how best to transfer a lump-sum benefit such as free school meals into a tapered system such as universal credit. An earnings threshold is perfectly acceptable to all reasonable people—by the way, we are talking about taxpayers. The only possible improvement I could encourage Ministers to look at is automatic entitlement if there is a disability in the family.
Let us get the facts straight. All reception, year 1 and year 2 children will continue to receive free school meals—full stop. The measures apply only to year 3 and beyond. All those currently receiving free school meals will continue to receive them until the end of their phase of schooling or 2022, whichever is the further away. Labour is creating false headlines by saying that any child will lose. Under the proposals, the Government will focus better on children who are in, or at risk of, poverty. That is, as we have heard, around 50,000 children by 2022.

Ben Bradley: Conservative Members know that no children will lose their existing entitlement to free school meals or free childcare as a result of our policies. Meanwhile, my jobcentre says that fear of universal credit is the biggest challenge that it faces in the roll-out. Will my hon. Friend comment on where that fear might be coming from?

Heidi Allen: My hon. Friend makes a valuable point. That fear is particularly prevalent on social media. There is a saying that a mistruth can travel halfway around the world before the truth has even put its boots on. That is happening with universal credit, aided and abetted by social media. Universal credit is not even in my constituency yet, but I hear from constituents who are worried about it. Oddly enough, I can put their minds completely at rest when I explain it to them.
As I have mentioned, tax credits recipients automatically get free school meals at the moment, which could mean that a family on £50,000 a year receives them. That cannot be right—[Interruption.] People on legacy tax credits who do not have disabilities in their family—those on the old benefit system who are transferring over—can have regular incomes of up to that level. The new system expands the criteria so that we can get to more children who need our support, not fewer.
Although I understand that a key part of any charity’s role is lobbying, I am disappointed in the Children’s Society. Its suggestion that 1 million children will lose free school meals is simply not true. Labour has jumped on that bandwagon, and it has taught me a lesson. There are colleagues from all parts of this House—SNP Members included—whom I trust and respect, and with whom I will continue to work to improve the lives of the most vulnerable in society, but if people think that the Labour party is the answer to tackling poverty, they are being misled. Today—this is a big wake-up call to me—the Labour party has clearly shown that it is prioritising headlines over improving the lives of struggling families. If you want a headline spun, Mr Deputy Speaker, ask the Labour party; if you want a competent job done, ask the Tory party.

Stephen Timms: I want to focus on a single point. The proposals for eligibility for free school meals are catastrophic for work incentives in the welfare system. The right hon. Member for Chingford and Woodford Green (Mr Duncan Smith)—I am sad to see that he is not in his place—used to tell us that the central point of welfare reform was to improve work incentives, but these proposals rob universal credit of its most attractive feature.
The Secretary of State for Education used to be in charge of universal credit, but this is not so much a criticism of him as a criticism of his predecessors. Ministers in the Department for Education have had seven years to solve the problem—admittedly, it is difficult and technical—of how to define eligibility for free school meals against the backdrop of universal credit. Instead of solving the problem, they have simply adopted a very lazy solution. In doing so, they are creating a very big problem for work incentives in the welfare system. One day, future Ministers will have to resolve that problem. It is disappointing that under the leadership of the Secretary of State, who understands universal credit as well as anybody, they have gone down this very lazy line.
My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) has just quoted from the universal credit White Paper, which sets out the philosophy that underpins the new benefit. I will quote another bit from chapter 2, which makes clear the principle that
“increased effort will always result in increased reward.”
That is what UC is supposed to be about, but under these proposals that will not the case. As we have heard, the Secretary of State for Work and Pensions told us that, when someone is just below the threshold, the jobcentre will advise them not to put in any more effort, not to get a pay rise and not to put in more hours. The jobcentre will recognise that, if they were to do that, they would end up worse off.

Sharon Hodgson: Does my right hon. Friend agree that this just reintroduces in a different guise the much maligned 16-hour threshold, which the Government said this was all to do away with?

Stephen Timms: My hon. Friend is absolutely right about that. The whole idea about UC was that it was supposed to get rid of cliff edges and benefit traps, but  instead it is introducing a benefit trap far bigger and far worse than anything in the old benefit system. This is completely scuppering the whole purpose of UC. If it is true, as the Secretary of State told us, that jobcentre coaches are going to say to people, “No, don’t take on extra work. Don’t get a pay rise. Don’t go for more hours because if you do, you will end up worse off,” how are people supposed to progress? Surely all of us would recognise that the point about this system is to encourage progression, not to have bureaucrats telling people, “Oh no, don’t progress because if you do, you’ll end up worse off.” This is a catastrophic holing of the whole purpose of UC, and it is not as though only a few people will be affected.
The prospectus was that UC would solve all these cliff edges and benefit traps, but instead it is creating one that is much bigger. It has been calculated—I am indebted to the Children’s Society for this calculation—that more than 1 million people will be caught in the trap if these proposals go ahead. I will explain to the Education Secretary exactly why that is; he can read this in briefing the Children’s Society has provided. Some 280,000 families are affected, containing between them more than 700,000 children. Among those are 125,000 families earning below the threshold who risk being worse off if they take on extra work or get a pay rise, as the Work and Pensions Secretary recognised. In addition, there are 150,000 families earning above the threshold who would be better off if they reduced their earnings to below the threshold, so that they would then qualify for free school meals. What sort of system is that? Everybody will recognise that we do not want a welfare system that puts people in that position, but that is the system we will end up with if this statutory instrument goes through. The Children’s Society calculates that almost 21,000 families, containing more than 80,000 children aged eight to 15, who earn more than £7,400 would be better off if they cut their earnings to below the threshold to qualify for school meals. This is a catastrophic arrangement.

Neil O'Brien: It is a pleasure to speak in this important debate, particularly after my hon. Friend the Member for South Cambridgeshire (Heidi Allen), whose speech was really powerful. It showed how badly Opposition Front Benchers have misjudged this debate. For weeks, outside this House, they have sought to pretend that we are taking free school meals off 1 million children, but that has come to this House and has bombed, because it is not true. The reality is that not a single child currently eligible for free school meals will lose them and that, under UC, 50,000 more children will be eligible for free school meals. This shows the limits of an approach that is all about the viral video and getting something that goes around on social media quickly; it goes too quickly for the fact-checkers to catch up with, but when it comes to this House and we learn the facts, it absolutely bombs.
If people are serious about being in government, they have to make choices, and this Government have made choices. The Opposition say they would like simply to give free school meals out universally, as part of a wider strategy in which we can just spend more money on everything and no one will have to pay any more tax—of course, it is all nonsense. It is the kind of dangerous nonsense that led to the Government borrowing a quarter of all the money they were spending in 2010,  a disastrous situation in which we also had half a million men and women thrown on the dole in the worst economic meltdown for a generation.
If we choose priorities that enable us to do important things for working families with children, that allows us to extend eligibility for the new tax-free childcare from 600,000 people to 1.5 million people, to have important things such as the 30 hours’ free childcare offer, to have the important two-year-old childcare offer, which under UC is being expanded by another 7,000, and to have the more generous childcare element of UC, which is going up from 75% to 85%.
Prioritisation also helps with important interventions such as the pupil premium, with another £2.5 billion for the most disadvantaged children, and the new fair funding formula for schools, which is backed up by another £1.3 billion. The year 7s I met the other day at Beauchamp College in my constituency, of whom 60% will be eligible for the pupil premium, will get to go to Cambridge, do a science project and see their lives and opportunities absolutely transformed, because we are prepared to take the difficult decisions, to invest in those children’s futures and to give them a better chance in life.
It is incredibly important that we do not simply drift back to the mistakes of the past. Compared with what it was like when I was at school, the help for children who are less advantaged is so much better now. We have done brilliant things such as destigmatising free school meals: pupils no longer go in with their money, so it cannot be seen who is on free school meals and who is not. When I think back to what it was like when I was at school, I can see the big improvement we have made since my generation.
We have seen big improvements for working families with children because even as we have brought down the worst Government Budget deficit in this country’s entire peacetime history, we have prioritised, and we have done so in ways that help the most vulnerable and that help to improve life chances for those who do not have them.

Layla Moran: It is a pleasure to speak in this debate, in which I wish to focus my remarks on childcare and free school meals.
I put on record that the Liberal Democrats are proud of the role that we played in the coalition Government to secure a generous tax-free offer on childcare that helps many families. Although it is true that it will extend to more families, it is also true that many others will be left out. That was never the intention. Many parents—particularly those with older children, lower childcare costs or lower incomes—will find themselves worse off under tax-free childcare than they would have been with childcare vouchers. It is unfair to close the scheme to new entrants, particularly because, unsurprisingly, the information about the closure of the scheme has not been spread as far and wide as it could have been. I urge all those parents who are listening to the debate—I am sure that there are many—to do their research before April, so that they can decide what is best for their families. All we are suggesting is that tax-free childcare and childcare vouchers are kept open concurrently, so that we can provide maximum flexibility for families. Surely, the Government would agree that that would be a good thing.
I hope that the whole House will join me in paying tribute the former Liberal Democrat Ministers David Laws and Sarah Teather for battling to secure universal free school meals for all children in key stage 1. Soon after I was elected, I visited West Oxford Community Primary School and had the pleasure of meeting the catering manager. She told me that, despite being sceptical of the policy initially, she now thinks it is brilliant. She took great pride in telling me of a boy from a deprived background who did not eat much veg at home because it is quite expensive. Slowly—slowly—she got him to love broccoli.
I am a primary school governor, and the teachers at the school are absolutely clear—this is backed up by the evidence—that universal free school meals are beneficial for learning and attainment and help all children. The Government like to nick Liberal Democrat policies—including same-sex marriage, the pupil premium and lifting the income tax threshold, as we heard in the spring statement earlier—and I am not precious, so they can have another one: extend free school meals to all children in primary schools. If not that, they could at least extend them to all children on universal credit.
Unlike under tax credits, universal credit creates an absurd situation wherein a single-parent household on the national living wage will have to work eight more hours to make it work. Surely, that is not what the Government intended. Linked to that, of course, is the fact that the number of children on free school meals will affect the pupil premium. I posit that that is the reason why the Government will not roll out free school meals to all children on universal credit—because, yes, it would be prohibitively expensive and would stop the targeting of the pupil premium.
May I suggest to the Secretary of State that, to sort that out, just decouple them? They are, in their own right, worthy policies. They are policies that are working and there is no reason to throw the baby out with the bathwater. May I urge the Government to think again on free school meals and to think again on closing the childcare voucher scheme?

Tom Pursglove: It is good to follow the hon. Member for Oxford West and Abingdon (Layla Moran). She talked about the years when our two parties were in coalition, and we all recognise and welcome the fact that we have those universal free school meals for infant children; it was a positive step forward.
I was not intending to speak in this debate this afternoon—and I am someone who is always happy to debate with anyone—but I was moved to speak not just because I have received quite a bit of correspondence from concerned constituents on this matter, but because I genuinely believe that it is incumbent on all Members of this House to argue and to make their points. In doing so, though, we must make sure that what we say is grounded in fact, and that we do not play fast and loose with the arguments, because what we say here has very real consequences for people in our constituencies.
Some very worried parents have been in contact with me today. This situation is rather like the time when the shadow Front Bench claimed that 40,000 children would wake up in poverty on Christmas day because the Tories  refused to pause and fix universal credit, and the chairman of the UK Statistics Authority said that that was not fully supported by the statistics and the sources on which it had relied. I am afraid that it appears to me that the Opposition are at it again. Therefore, I want to use my remarks this afternoon to speak directly to those concerned parents in Corby and east Northamptonshire who have been in touch with me about this issue.
First, we would all agree that free school meals, and the provision of those free school meals, should be targeted at the most disadvantaged children; I would like to think that there was universal agreement on that point. To say that meals are being taken away from those disadvantaged children is simply plain wrong. It is not just me who is saying it—[Interruption.] Opposition Members can chunter all they like, but that is the case. The independent “Channel 4 News” FactCheck website exposed all of this for exactly what it is and I recommend that everybody takes a look at it. “Channel 4 News” would not necessarily be considered to be a friend of the Conservative party, but it made this point none the less. No child will lose their free school meals during the roll-out of universal credit as a result of these changes. In actual fact, an extra 50,000 children will probably have access to free school meals by 2022. I would welcome that, and I would expect the Opposition to welcome that, too. I cannot possibly see what there is to argue against in that position. Again, I make the point that, since 2010, we have extended the availability of access to free school meals to disadvantaged students in further education and introduced universal infant free school meals.
We should not look at this issue in isolation; other things are going on as well that are very important to those families. Not only do we have record numbers of people in employment, but we have also taken 4 million of the lowest paid out of income tax altogether. We have cut income tax for 31 million people in this country, and we have focused on the principle that being in work should always pay. Any fair-minded person in this country would agree that that is the right approach, but that, of course, there should always be a safety net for those who find themselves in need. That is exactly what this policy, in a holistic sense, allows.
I am proud of our record. I have to say that I am slightly perplexed by where we find ourselves today, because rather like on police funding, on local government funding, and on protecting our industries from dumping on our market, the Labour party tonight will vote against extending free school meals for another 50,000 children, and I find that extraordinary.

Mohammad Yasin: It is a pleasure to follow the hon. Member for Corby (Tom Pursglove). The Government know that stopping free school meals for the poorest children is a shameful policy. They sought to bring the measures in using statutory instruments, in the hope that any challenge would be ineffective. It is clear that the Government do not want to explain this indefensible change.
Some 3,700 children in Bedford are set to miss out on vital support if free school meals are withdrawn from families on universal credit. The Government need to understand that the poverty trap is very easy to get into, but very difficult to get out of. Every penny counts for  those families, and for many working families there simply are not enough pennies to get through the month. Last summer, 47% of children who received support from food banks were between five and 11 years old.

Heidi Allen: Will the hon. Gentleman give way?

Mohammad Yasin: I am sorry, but I cannot. Many other Members want to speak and it is fair to give them a chance.
During the summer holidays 4,412 more three-day emergency food supplies were given to children than in previous months, and we know that children on free school meals already underperform in schools. Why would any Government choose to make life more difficult and more challenging for those children?

Mark Menzies: Will the hon. Gentleman give way?

Mohammad Yasin: A number of Members want to speak. It would be unfair if I gave way, as the hon. Gentleman has spoken already.
Why would a Government who claim to want to tackle inequality, to help the disadvantaged, to tackle child obesity and to help out those who are just about managing come up with a policy that does the exact opposite? The new earnings limit is a huge step backwards. According to the Children’s Society, 1 million children in poverty who could benefit now will not. This policy also undermines one of the main reasons given for introducing universal credit in the first place—to ensure that “work always pays”. The new rules will create a situation where working families will be punished for taking on extra hours or accepting a pay rise because they would have their free school meals taken away. These are worth around £400 a year per child—a huge sum for those on a low income.
A recent report from the Food Foundation highlights the deprivation gap, which has increased by more than 50% in a decade. Children in the poorest areas of England are twice as likely to be obese as their wealthier neighbours. The Government could have tackled that problem by increasing the uptake of free school meals and ensuring that all children from low-income households receive a nutritious meal at lunchtime. Instead they are taking those meals away. The Government should have learned from their attempts to take away free school meals in the manifesto that they put to the country last year that they have no mandate to reduce school meals and it makes no sense to do so. Schools cannot teach hungry children. If the Government were serious about life chances and social mobility, they would not be taking food out of the mouths of babes.

Chris Philp: We live in strange political times both in this country and across the Atlantic, where we frequently hear reports about fake news. In such times it is therefore particularly incumbent on Members of all parties in this House to be very careful about the way in which they use and present facts, because democratic discourse is impossible without honest and accurate facts. We undermine our entire system of democracy when elected Members of this Parliament play fast and loose with facts.
We have heard Members in this debate saying that free school meals are going to be reduced—that was the phrase used by the previous speaker. Other Opposition  Members have said that free school meals would be “taken away”. It is clear that those statements are not accurate. Several colleagues have referred to the “Channel 4 News” FactCheck discourse on this matter, and it is clear that no children currently in receipt of free school meals will have them taken away. In fact, more children will receive free school meals as a result of these proposals. It is simply untrue to say that 1 million children will have their free school meals taken away or reduced. By making comments implying that, the shadow Education Secretary, who I can see chuntering, is doing our democracy a disservice.
Perhaps the hon. Lady is trying to insinuate that there was a Government policy that would have provided extra school meals, but for some kind of U-turn. The “Channel 4 News” FactCheck is clear about that as well, and the Government have also been clear about it. There was an interim transitional measure. My right hon. Friend the Member for West Suffolk (Matt Hancock), when he was a junior Skills Minister, made that clear when the scheme was set up in April 2013, and my hon. Friend the Member for Scarborough and Whitby (Mr Goodwill), when he was a junior Education Minister, made the same point last July. It is wholly inaccurate to suggest that there was ever a hypothetical Government policy under which these children would ever have received extra school meals.
The shadow Education Secretary has done this House and herself a great disservice—[Interruption.] Indeed she has the right to speak, but she ought to take care to be accurate when she does so, because her words matter and she should weigh them carefully.

Angela Rayner: On a point of order, Mr Deputy Speaker. Is there any recourse for me to challenge the fact that an hon. Member is suggesting that I have misled this House in this debate?

Lindsay Hoyle: First of all, nobody will mislead this House because we are all hon. Members. I am sure that when we come to the wind-ups, everything will be put in its correct order.

Chris Philp: The hon. Lady and her party have suggested that everybody in receipt of universal credit should receive free school meals. That has never been the policy of the Government, but apparently it is the policy of the Labour party. That would entail about 50% of schoolchildren receiving free school meals. She was asked, in a direct question from my right hon. Friend the Member for Broxtowe (Anna Soubry), how much this policy, which goes beyond that in the Labour manifesto, would cost and how she would pay for it, but she declined to answer. If she is advocating this policy which goes far beyond current Government policy—as she clearly is—she ought to explain how much it would cost and how she would pay for it, because promising things for free without explaining how they would be paid for is a deeply irresponsible thing to do. I will support the Government in this evening’s Divisions.

Thelma Walker: It is time to be frank. Universal credit is currently a failure. It is not working how it was meant to. It is not supporting the people who need it. Its roll-out happened too fast,  which meant that there has not been time to fix the many issues that have been brought to the House’s attention.
Twenty-four per cent. of children in my constituency live in poverty. In some areas, that figure increases to 40%. For some of the children whose parents are on universal credit, the hot, nutritionally balanced meal they have for lunch at school will be their main meal of the day. In no way is that a good situation to face, but at least those children are being fed. Well, not if Government Front Benchers have anything to do with it. Removing free school meals from those families who are claiming universal credit and who need them the most is deplorable. What kind of society do we want to live in? What Government in their right mind would take a hot meal off a child in need?

Paul Masterton: rose—

Thelma Walker: I am going to make progress.
Let me take hon. Members back to the 2016 Conservative party conference, where the Prime Minister said:
“I want to set our party and our country on the path towards the new centre ground of British politics built on the values of fairness and opportunity where everyone plays by the same rules and where every single person—regardless of their background, or that of their parents—is given the chance to be all they want to be. And as I do so, I want to be clear about something else: that a vision is nothing without the determination to see it through. No vision ever built a business by itself. No vision ever clothed a family or fed a hungry child. No vision ever changed a country on its own. You need to put the hours in and the effort too.”
Why are the Government not following the Prime Minister’s vision? Is it another sign of how she is in position but not in power? If she still believes in her own words, she must stand up and stop this attack on the poorest in our society.
My local authority, Kirklees Council, has seen a 20% increase in pupils claiming free school meals over the last four years, which goes to show how hard the Government’s austerity programme is hitting families. There has been a huge spike in food bank use, which also shows that we are a country on the cliff edge. Food banks do an amazing job of supporting those in need, and I commend the work of local food banks such as the Welcome Centre, which serves my constituency.
What kind of country do we want to live in? Do we want to live in a country where a child clings to a teacher’s hand as the school holidays approach, not wanting to leave school because they know they will be hungry for the next six weeks? Do we want to live in a country that chooses to let disadvantaged children go hungry? Do we want to live in a country where a child comes to school with a lunchbox filled only with a slice of stale bread? I have witnessed those things, and I can say that it is certainly not the kind of country I want to live in. Some 6,400 children in Kirklees will lose their free school meals because of the Government’s actions. I will bring my remarks to a close with a thought from Buzz Aldrin: if we can conquer space, we can conquer childhood hunger.

Maria Caulfield: I am pleased to follow the hon. Member for Colne Valley (Thelma Walker), but I have not heard any real vision at all from  Labour Members. It is disgraceful that their only vision for working-class people in this country is to remain on benefits. Universal credit is getting people into work. Some 63% of people on universal credit get into work, compared with 59% who were on jobseeker’s allowance.
No one can tell me that I do not know what it is like to grow up in a working-class family. I grew up in a working-class area of south London, where there was no hope or aspiration for working-class kids like me. We were told that all we would achieve was a lifetime on benefits. Our working-class communities up and down this country can achieve a lot more, and universal credit will help them to do so.
The second reason I am particularly angry with Labour Members is that they are spreading fear. I think they underestimate the fear they are causing in this country. When I was growing up, my family were poor. My dad worked as a labourer, and he did not often know when his next job was coming. If his job finished early, he did not get paid. If the subcontractor did not get paid, he did not get paid. There is a sickening, gnawing feeling in your stomach when you are not sure where the next penny is coming from. To tell 1 million families in this country that they will lose free school meals when that is absolutely wrong is scandalous, and Labour Members should be ashamed.
Let me reiterate the facts. All children in reception, year 1 and year 2 will continue to get free school meals, thanks to this Government. No existing recipients of universal credit will lose free school meals, thanks to this Government. Some 50,000 extra children will get free school meals who currently do not, and that is down to this Government. The means testing will not affect those who are earning just over £7,000, but those who are earning around £19,000 to £24,000. I do not think that Labour Members understand the impact they have when they spread this fear—and it is not a genuine mistake; it is political point scoring and using working-class families in this country as political football. They should be ashamed of themselves.
I will be supporting the Government. I will be supporting 50,000 vulnerable families getting free school meals. If Labour Members vote against those working-class families, they need to look at themselves in the mirror, because it is the same thing they did a few months ago when they voted against 60,000 young people in this country benefiting from the abolition of stamp duty for first-time buyers. Labour Members talk about supporting working-class families in this country, but it is the Conservative Government who are actually delivering for them.

Drew Hendry: I will limit my remarks to the universal credit portion of this debate. In accepting the failures so far, the Government have made some changes, but as my hon. Friend the Member for Airdrie and Shotts (Neil Gray) pointed out, the changes due to come into force in April do not go far enough. Ministers should pause the roll-out of universal credit and review all the processes.
I want to go through a couple of the issues, but I could speak for a lot longer on many of the issues affecting my constituents. My constituency was a pilot area from 2013, and went from live service to full service in June 2016. Local agencies, Highland Council  and I have been voicing such concerns since the pilot, and the proposed measures do not scratch the surface of what is required. The Secretary of State said earlier that this benefit will be “at the cutting edge”. I say to those yet to experience full service that, yes, they will see more cutting, particularly when it comes to the housing arrears that are being built up.
Like other local authorities, Highland Council is paying the price, and this will have an impact on all our communities, not just on people who are on universal credit. The additional administration costs alone are running at hundreds of thousands of pounds, but rent arrears continue to soar and will have an impact on the delivery of much needed housing, for example.

Luke Graham: The hon. Gentleman is making a very serious point about housing benefit. Does he welcome the change that allows the benefit to be paid directly to the landlord, as opposed to going to the claimant?

Drew Hendry: I welcome any change that allows such things to happen. I would point out that we made that request of the Government for many years, and the concession was finally made, as I have pointed out, but much more needs to be done.
Rent arrears continue to soar, as I have said. Rent arrears due to universal credit were already at £1.6 million in Highland in 2016, but they were at £2.2 million in March 2017, and just six months later they were at £2.7 million. The average rent arrears for someone not on universal credit is £250, but for those on universal credit it is £840. We know that 30% of private landlords have already evicted a tenant because of universal credit arrears. According to the DWP’s own figures, this means that over 70,000 tenants in private accommodation face the threat of eviction due to the shambles of universal credit.
The UK Government continue to ignore the plight of people with a terminal illness who are forced to meet work coaches. I give credit to my local jobcentre, which has tried to put in place local workarounds to overcome the faults in the process. The UK Government must listen to MND Scotland, MND UK and Macmillan CAB, and remove these conditions to allow the terminally ill and their families some dignity as they face the end of their life. I ask Ministers to meet me to discuss how that can be brought forward. MND UK has said it does not believe that people who have claimed using DS 1500 should have to meet and have a conversation with a work coach, as this is highly inappropriate. The Government have already been found to have acted unlawfully in relation to 1.6 million people, at an estimated cost to the taxpayer of £3.7 billion, and they should not risk the same kind of slap-down over their treatment of the terminally ill.
As the roll-out continues, many more right hon. and hon. Members will feel the sharp effects on people and their communities. Ministers should go further in acknowledging the systemic failures before it adds more costs to people’s lives and drains local government of vital resources.

Michael Tomlinson: I am pleased to be called to speak in this important debate, and it is a pleasure to follow so many powerful speeches by Conservative Members.
Yet again, we heard it said from the Labour Front Bench that children in poverty will lose out in relation to free school meals. First, that is factually inaccurate; and, secondly, figures on poverty are often bandied around in this place, but it is time we had a grown-up conversation about both poverty in general and child poverty in particular. So often, the Labour party uses relative poverty as a measure. When there is a recession, a fall in average earnings will of course mean that suddenly—hey presto!—children are lifted out of poverty: the poverty statistics improve. For example, in 2008, following Labour’s recession, there was a sharp reduction in the proportion of children in workless families living in relative poverty. Living standards had not improved and incomes had not increased, but, as a result of the measure that Labour used, suddenly children were lifted out of poverty. Conversely, when real wages rise, poverty rates increase, despite the fact that people’s incomes have not fallen.
It is time we had a grown-up conversation about this, because relying on that measure fails to tackle the root causes of poverty and could result in Governments pursuing skewed policies. Work remains the best route out of poverty, which is why I firmly support universal credit and these measures. These measures are part of a £1.5 billion package brought in by this Government. Frankly, I am surprised that Opposition Members will not support them this evening.
That brings me to free school meals. Children currently in receipt of free school meals will not lose out. In fact, 50,000 more children will benefit from free school meals than under the legacy benefits system. Free schools meals should be targeted at the most vulnerable. It is not a fair allocation of resources that a family with a total income in excess of £40,000 is entitled to free school meals. Neither would it be right and proper to aim free school meals at 50% of children, yet that is what would happen if these measures are not allowed to proceed this evening. Free school meals should be targeted at the most disadvantaged. These measures will ensure that help is targeted at those who need it most, and that should attract support from both sides of the House.

Several hon. Members: rose—

Eleanor Laing: Order. I have to reduce the time limit to three minutes, because so many Members wish to speak.

Laura Pidcock: I have been texting my team furiously during the debate to check, double check and triple check that what I am about to say is accurate. I asked them to ring the DWP and the Library and then assure me that this is right. The vast majority of my constituents who currently receive tax credits are not on universal credit and will not be migrated on to it for some time, and they will not be protected by transitional arrangements, which will not apply. I have just checked this with the DWP and the Library. This is about the future denial of free schools meals, and it is valid that we have a conversation about that. I am not interested in embellishment in this debate, because the truth is enough.
For people who are in work and in poverty, or looking for work and in poverty, food is a huge part of their expenditure. It is a never-ending struggle to make sure  that there is enough to eat, and that children are getting enough to keep them healthy and well. Children cannot concentrate in school when they are hungry—we all know the arguments. For many young people, that one hot meal is all they will get. I have not been told, despite the claim being repeated time and again, what calculation was used to reach the figure of 50,000 for the number of extra children who will get free school meals. I am sorry, but I am just not able to believe that on a whim, or on a calculation that was plucked out of thin air.
Under the current system, families are normally entitled to free school meals if their income is under £16,190. That will be changed to £7,400 per year, unless it is covered by transitional protections. The reduction to £7,400 is, frankly, delusional. Who will it help? What is the figure based on? Which advisers, experts or charitable organisations have the Government met who actually think that slashing the threshold is a good idea for children in low-income households? The BBC rang around headteachers to try to get a quote on these changes, but not one headteacher knew about them, so what consultation has there been with schools?

Anna Soubry: Will the hon. Lady give way?

Laura Pidcock: Time is very short, so I am certainly not going to give way to somebody who has intervened many times and was not here for the start of the debate.
Nearly 2,000 children in my constituency quite rightly—

Anna Soubry: Just for the record, Madam Deputy Speaker, I was in this place when the debate started.

Laura Pidcock: Well, that was not my experience. Anyway, the idea that claimants in my area—[Interruption.]

Eleanor Laing: Order. I cannot hear the hon. Lady. [Interruption.] The hon. Lady should not shout from a sedentary position when I am defending her and giving her space.

Laura Pidcock: I have 17 seconds left and there have been so many interruptions.

Sharon Hodgson: My hon. Friend is making an excellent speech. As a fellow north-easterner, I want her to be able to finish her point.

Laura Pidcock: There are 2,000 children in my constituency who rightly receive subsidised school meals. The reason that new claimants after 1 April will not be protected is not that they no longer need that protection or need those meals; it is due to arbitrary cuts. This change will ensure that more children are in poverty and that more people have to access food banks. The Government may be able to justify that in this Chamber, but how can they justify it to a child? Taking all the proposed changes together with all the changes that have already happened to the so-called social security system, the only conclusion I can draw is that there is no security anymore. That is not embellishment: I know poverty when I see it staring me in the face in my constituency surgeries. We do not need to lie, we do not need to embellish. The truth is good enough: these changes are shambolic.

Simon Clarke: As a fellow north-easterner who also has a great deal of poverty in his constituency, perhaps I might be allowed to speak in this debate.
I will be blunt. I am tired of the Opposition playing games with this issue, not just today but over the preceding weeks and months. Let us be very clear: by 2022, 50,000 more children will have free school meals than is the case today. Nobody—not one child in any school, anywhere in our country—is going to lose the free school meal they currently receive. I must admit that I am somewhat surprised, even by the standards of the Labour party, by today’s claims. It was only a month ago, in response to a letter from me, that the chair of the UK Statistics Authority, Sir David Norgrove, wrote to rebuke the now former shadow Secretary of State for Work and Pensions, the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), about her use of statistics in this field. All the claims were found by the UK Statistics Authority not to be supported by statistics, or by the sources on which they purported to rely.
We can add today the frenzied assertion that universal credit will leave 1 million children without a free hot school meal. That is wrong, not just because of its flimsy attachment to reality, but because it creates needless anxiety in the communities we serve. We need to be very clear about why universal credit is being introduced in the first place. The hostile approach with which Labour has chosen to approach the issue is regrettable and damaging. It is not about what is right for the jobless or for the working poor in our society; it is about what is in the electoral interests of the Labour party.
The reality is that the professionals I have spoken to at the DWP have told me repeatedly that this system is working and that they believe it is doing the right thing by the people whom they serve. Women like Sindy Skelton—[Interruption.] Perhaps the hon. Member for Bootle (Peter Dowd) wants to accuse Sindy of being a liar or of misleading me in some way, but I think that jobcentre staff up and down our country have every right to be angry at the way in which they are permanently castigated by Opposition Members as somehow the embodiment of a cruel and faceless state. Ministers have demonstrated time after time that they will take whatever action is necessary to make sure that universal credit delivers the outcomes we all want. If Labour is serious about helping people into work, and serious about supporting the most vulnerable in our society, it should give up the cheap posturing we have seen today. Many Labour Members know in their heart of hearts that they have over-embellished and laid things on a bit too thick. In the end, there is a serious debate to be had about poverty reduction.

Heidi Allen: Does my hon. Friend think that the number of Members on the Opposition Benches, and the lack of retaliation, means that they have realised that they have pushed it too far, and that they are now woefully out of their depth and just plain wrong?

Simon Clarke: My hon. Friend made a very powerful speech on this theme earlier. I think what she says is true. In fact, there is a pretty sparse attendance on the Opposition Benches, given that this was meant to be an  open goal. This was absolutely all about clips for the TV news, Facebook pages and Twitter—“The heartless Tories ripping food out of the hands of kids.” Well, that is not happening. None of us came into politics to make anyone’s lives worse. I am sick and tired of being told that we are somehow the bad guys because we believe in running a balanced economy and focusing on helping those in need, rather than trying to use them as political footballs to achieve political goals.

Ruth George: As the chair of the all-party group on universal credit, I want to lay out the facts of the measures for Members from across the House. I am very sorry that they have not been before Select Committees to allow them to look properly at the case. Unfortunately, the facts in the Government’s case are wrong. They claim that this is about parents of school-age children who are on about £7,400 a year and say that, with other benefits, those people will be on between £18,000 and £24,000 a year. However, according to the benefits calculator on the gov.uk website, we are thinking about a single parent with one school-age child who is on £14,200. She will be on the poverty line but will not be eligible for free school meals. Under tax credits, that single parent would have been £1,600 a year better off. She will lose that money and her child will not be able to claim free school meals. She will be £25 a week worse off and will still have to pay around £11.25 a week towards school meals. She does not get a free school meal at the moment, but she can afford that, because she is on tax credits, which is a far more generous system.
This is the trouble with universal credit: it cuts an average of £1,300 a year from working single parents. At the moment, one in three of the children of these single parents is in poverty. Gingerbread, the Child Poverty Action Group, the Children’s Society, the Institute for Fiscal Studies and the Resolution Foundation all say that universal credit will increase the number of children in poverty over the next four years by 1 million. Not only will those children be in poverty, but now, thanks to a statutory instrument, they will not be able to claim free school meals. They will not get that hot, nutritious meal at lunchtime that will help them to concentrate throughout the day and to realise the levels of nutrition that they need. This also affects their eligibility for school trips through the pupil premium.
My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson), the chair of the all-party group on school food, gave Education Ministers the proposal of delinking the pupil premium to enable pupils to still be able to receive free school meals. Children might not be in poverty now and might not be receiving a free school meal, but they will be in poverty in four years’ time, thanks to the cuts introduced under universal credit. They will not be eligible for a free school meal either, and they should be. Not to make that change, not to look properly at it and to go on figures about benefits that are wrong—to try to mislead the House with figures in a consultation document that are blatantly wrong about the people’s income—does a disservice to the 1 million children and the 280,000 families who will be on the cliff edge and seeing a disincentive to work. Across this House, we all want to see an incentive to work. Any parent with children who is earning between £7,400 and around £11,000 a year will not be better off in work.

Sharon Hodgson: My hon. Friend mentioned decoupling the pupil premium. Under the Digital Economy Act 2017, that is now possible. Schools already know how to claim pupil premium for the universal infant free school meals offer. Does she agree that we are totally able to decouple the two?

Ruth George: Absolutely. I thank my hon. Friend for her intervention. In a Westminster Hall debate a few weeks ago, Conservative Members said it was because of the cost of the pupil premium that they did not want free school meals extended, and that we could therefore set the pupil premium at the level proposed by the Government. We must, however, make sure that every child in poverty is entitled to the free school meals they need so that they have a better chance in school and better life chances, and to ensure that we try to eradicate child hunger instead of increasing it.

Helen Whately: We are here to improve lives and to raise the sum of human happiness. We know that the best way out of poverty is work and that purposeful work is the key to human happiness, and we all want to give kids the best possible start in life, which includes meals for the poorest and high-quality pre-school childcare, which we know improves outcomes for the most disadvantaged children in our country.
We know, too, that universal credit is helping to improve lives. It has been on offer in my constituency for some time and has now been fully rolled out. The feedback I get from the jobcentres that serve my constituency—job coaches tell me this with great passion—is that it is helping them to help people, and helping people to get into work, increase their hours and find better work. It is overwhelmingly a good thing. I spoke to my local citizens advice bureau to find out what problems it was experiencing, following rumours that universal credit was causing trouble, and on the day I went in, there had been two calls about universal credit. I asked what they were. One was, “How can I get it?”, and the other was, “Am I eligible?” So people were calling the CAB because they wanted to be on universal credit, because they had heard good things about it. I am therefore really concerned that we are hearing such misleading information in the Chamber, when we know that universal credit is helping people to get into work, stay in work and find better work.
The Government have listened to and addressed concerns about universal credit, for instance by giving people better access to advance payments and not making them wait for payments. The Government are doing exactly the right thing to make universal credit work even better, and Labour Members should be supporting that, not trying to block it. I am worried that they are stuck in the 1970s. Perhaps then it was okay to give up on people and condemn them to a life on benefits, but we know now that that is not the right thing to do. They should be supporting us to help their constituents to get into work and stay in work.
On free school meals, we have seen a shocking abuse of figures. We know that as a result of the Government’s policies, 50,000 more children will get free school meals and no child will lose their right to them, so let us not have any scaremongering about children losing free school meals. Let us also have a bit more clarity about  how Labour might pay for their proposals which, according to latest estimates, would cost the country an extra £100 billion and increase borrowing per family by £4,000. I say to Labour Members, “Let us do the right thing.” Let us not play party politics, but help to make people’s lives better.

David Linden: I am mindful of the time, so I will not take up as much of it as I had planned.
It is disappointing that there are now few ways in which the House can express its opinion, but one of those ways is by our debating and voting on statutory instruments. We see time and again on Opposition days the House making its voice clear. In October, the House voted by 299 votes to zero to call for a halt to the roll-out of universal credit, but that did not happen. Conservative Members talk about parliamentary sovereignty and the will of the House being listened to, but they do not then follow through. I am glad, therefore, that we have an opportunity today, on a binding vote, to make our view clear to the Government.
Today we are debating four statutory instruments. I will focus on the one relating to universal credit, but before I do so, I want to touch on childcare vouchers. I and many other Members are worried about the UK Government’s plans to close the childcare voucher scheme, so we urge them to reconsider. I want to draw a contrast with some of the family-friendly policies that we are pursuing north of the border, such as the baby box scheme, which gives children the very best start in life from birth—that sends a strong signal about equality. We have free school meals for children in primaries 1 to 3 and the doubling of childcare provision. On the latter, I must declare an interest, as my son is starting nursery in August, and is very excited about going to Sgòil Àraich Lyoncross. The Scottish Government have made it clear that children should be able to get such childcare, and it is good that we are delivering on that.
I wish to commend the new city government in Glasgow led by Susan Aitken. In the last council budget, they announced that free school meals would be rolled out to primary 4. As someone who is married to a primary school teacher, I know at first hand the importance of schoolchildren having a warm and nutritious meal inside them. I welcome the efforts of Glasgow City Council to tackle holiday hunger as well.
I will focus briefly on universal credit, because I am mindful of the time. I pay tribute to my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), who has done a power of work on universal credit since long before it was fashionable to talk about it. He has, I believe, been pursuing the issue since 2013. I think that his work on terminal illness is especially important. There have been some pretty unedifying scenes on both sides of the Chamber today. We should be mindful of the fact that we are talking about real people, and, in particular, about people with terminal illnesses. That message should go to all of us, including me.
I have made it clear to journalists that I have no interest in being on “Newsnight” or “Question Time”, or in clocking up views in Nigeria on YouTube like my  hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black). I see the job of being a Member of Parliament as being out in the constituency listening to people and hearing about lived experiences. I appreciate that at various points during the debate, the Government will say that the Opposition are scaremongering, and they can say that to a certain extent—they would be expected to say it. However, as a constituency Member of Parliament, I speak to constituents regularly, and people at the Parkhead housing association, the West of Scotland housing association and the Glasgow NE food bank say that universal credit must be halted.

Chris Green: I have a qualified welcome for this important debate. I will touch briefly on universal credit and free school meals.
On universal credit, I welcome what has been done by the Chancellor and a succession of Secretaries of State. Universal credit is there to get people into work and to ensure that, when they are in work, they can take on more work, make progress in their careers and, ideally, cease to be dependent on welfare payments. That is what we want to happen, and the system has been reformed over the years to become better and better.
I have very little time, but I want to highlight the speech made by my hon. Friend the Member for South Cambridgeshire (Heidi Allen). She captured brilliantly the reforms that have been delivered in recent years and made the point that a debate that should have been about improving universal credit has turned into a headline-grabbing agenda by the Labour party.
I have visited the two jobcentres that serve my constituency, and the enthusiasm of the staff in both of them for universal credit was incredible. I was blown away by their support for it. They can help people now: rather than being faceless, grey, stand-offish organisations, they can engage with people in a way that has not been possible for them before. We should support universal credit enthusiastically—and, yes, where improvements need to be made, let us make them.
On free school meals, we ought to have a vision that the children who are most in need should receive them, but they should not be received by the children of those who are earning a significantly higher amount of money. It is disappointing that Labour Members will vote today to prevent 50,000 children—the poorest children in our country—from receiving free school meals when universal credit is rolled out and will vote to ensure that families with an income of more than £40,000 a year continue to receive them. I think that the Labour party has the wrong values, but it is not just the Labour party: in my constituency, the Liberal Democrats have been putting out propaganda saying that the children of those who earn more than £7,400 a year will no longer receive free school meals. That is not a cut-off; it is only a fraction of the actual income.
Because of the time constraint, I will end my speech by saying that I support the Government and their actions.

Peter Dowd: I would like to feel able to thank every Member who has spoken in the debate, but, frankly, the only meals Tory Members are interested  in are when their rich donors pay them to have them. Those are the only meals they are interested in. [Interruption.] That is all they are interested in.

Several hon. Members: rose—

Peter Dowd: We have been asked today to tell the truth: I have just told the truth, and the truth hurts as far as Tory Members are concerned. [Interruption.] The four statutory instruments we are debating today—

Peter Dowd: That has upset Tory Members; they are deeply upset about it. The four statutory instruments taken together would end childcare vouchers, restrict the number of children receiving free school meals and limit access to universal credit for the self-employed and disabled people.

Rachel Maclean: Will the hon. Gentleman give way?

Peter Dowd: No, I will not.
Far from seeing the light at the end of the tunnel, this Government have indicated once more their relentless desire to throw some of the poorest into the shade. While the Chancellor came to the House today to pat himself on the back, with no sense of irony whatsoever, these new regulations remind us that austerity is far from over. Depriving some of the poorest children in the country access to a free school meal on its own would be considered shameful, but paired with the restriction on childcare vouchers and the introduction of tougher criteria for universal credit, we have a cruel cocktail of cuts and misery—and Tory Members know a lot about cocktails as well when they are at their meals.
The Children’s Society estimates—[Interruption.] Fact check: the Children’s Society estimates that the changes the measures the Government are seeking to introduce will see 1 million children in poverty unable to benefit from free school meals because of them pulling the rug on the current transitional arrangements, and to add insult to injury, by setting an income threshold for the children of those on universal credit to qualify for free school meals, the Government are creating a cliff-hanger which will leave around 350,000 families worse off. [Interruption.]

Eleanor Laing: Order. There are clearly heightened tempers, but we must have some decorum to allow us to listen to Mr Dowd.

Peter Dowd: Thank you; “They don’t like it up ’em.”
These families, who will move just above the threshold, will be forced to shoulder the cost of school meals from their household budgets at the cost of hundreds of pounds per child.

Iain Duncan Smith: The hon. Gentleman now has to answer one very simple question. He and his whole Front Bench team have been putting it about that 1 million children will lose their right to free school meals. Will he now stand at the Dispatch Box and apologise to the House for misleading the public?

Peter Dowd: What I will say is this—[Interruption.] If Tory Members want to listen, I am more than happy to say this:
“I am unable to watch passively whilst certain policies are enacted in order to meet the fiscal self-imposed restraints that I believe are more and more perceived as distinctly political rather than in the national economic interest.”
That is from the right hon. Gentleman’s resignation letter.
Why do the Government feel the need to cut the number of children who are eligible for free school meals? Why are the Conservatives keen to limit the number of parents eligible for childcare vouchers? And why do Ministers seem content with ensuring that the self-employed and disabled on universal credit are worse off and at further risk of sanctions?
The Chancellor’s mantra, as with his predecessor, has been fiscal prudence, a concept hijacked by an ideologue for ideological purposes. He has long proclaimed, whether on spending on public services or on the welfare state, that there must be belt-tightening. In the name of balancing the Budget, we have seen almost a fifth of women’s refuge shelters close under this Government’s cuts, while 41% of children’s services are unable to perform their statutory duties. Yet the Chancellor can somehow conjure up money to give large multinational corporations and the wealthiest £70 billion-worth of tax cuts by the end of the Parliament; no belt-tightening there.
If we look at the decision to cut the top rate of income tax from 50p to 45p alone, research—fact—has shown that those earning over £1 million pounds a year have saved on average £554,000 from 2013 to 2018. There was no belt-tightening there, either. [Interruption.]

Eleanor Laing: Order. Members must not shout at the hon. Gentleman.

Peter Dowd: Over the past five years, this tax cut has cost the British taxpayer £8.4 billion. That £8.4 billion could instead have fully funded universal credit, extended free school meals or ensured tax-free childcare for all. Fact check: that is a fact.
Childcare remains the biggest cost for working households. For some families, the childcare bill is crippling their finances. The childcare voucher scheme is not only popular but well subscribed, with some 780,000 parents using vouchers and more than 50,000 employers offering childcare voucher schemes. Most employers who provide vouchers currently do so through salary sacrifice schemes, exempting recipients from income tax and national insurance on vouchers up to a maximum of £55 a week. The scheme has its flaws—for example, it does not cover self-employed people and requires employers to be registered—but overall, most parents and employers who use the scheme believe that the system works, and an overwhelming majority want it to stay. There is another fact check.
It is not really surprising that the Government are planning to pass regulations this evening that would close the scheme to new applicants, particularly considering their shambolic introduction of the alternative tax-free childcare scheme. The Government’s much-awaited tax-free childcare scheme opened to parents this year, a full five years since it was originally announced. [Interruption.] That is another fact that Conservative Members do  not like. To call the roll-out disastrous would be a grave understatement. On top of the delays, HMRC’s website crashed, forcing the Government to pay nearly £1 million to parents in lieu of childcare payments. Hardly a great start! Under the current voucher system, the amount of childcare a family gets is tied to their earnings. Under the new system, it is based instead on expenditure, so the childcare system will benefit those who can afford to spend the most, with the Government’s headline figure of £2,000 tax free reserved for those parents who have an extra £10,000 lying around.
It is well known that the tax-free childcare scheme is the pet project of the Chief Secretary to the Treasury. She has consistently called for better value for money when it comes to public spending and said that the Government should avoid spending money that they do not have. However, under the new scheme, parents sending their children to independent schools will also be able to claim the £2,000 tax-free amount for childcare. How can the Chief Secretary justify that? Surely, the money spent giving a tax break to those who can afford to send their children to some of the most expensive fee-paying schools in the country could instead be used to ensure that a million children do not lose access to free school meals. There is no reason why the Government should not listen to the calls of the Opposition, of parents and of employers across the country who want to keep the voucher scheme open and extend it to the self-employed.
I should like to turn now to the Local Authority (Duty to Secure Early Years Provision Free of Charge) (Amendment) Regulations 2018 and the Universal Credit (Miscellaneous Amendments, Saving and Transitional Provision) Regulations 2018. As we have heard, the first of these instruments creates new eligibility criteria for families applying for 15 hours of free childcare for their two-year-old through universal credit—

Several hon. Members: rose—

Eleanor Laing: Order. The hon. Gentleman is not going to give way. Please allow him to finish.

Peter Dowd: The facts do rile them, don’t they? They have asked for facts all afternoon. Then they get a few and they just don’t like them. I shall be coming to a close very shortly. It is as simple as this. Fortunately, at least the public now have a clear choice between the two parties: a Government of the past wedded to a failed ideological nightmare, or a Labour party that will govern for the many, not the few. Finally, is there any vulnerable group or person that this self-obsessed, clapped-out, washed-out, out-of-time Government are not prepared to attack?

Damian Hinds: There are sometimes days when Ministers have to come to this House to defend difficult decisions that have had to be made, but this is not one of those days. Today, we are talking about increasing spending and widening eligibility. I would never dream of accusing any Member on either side of seeking to mislead the House, but I will make a more general point: the mere repetition of a falsehood does not make turn it into the truth.
We have had fully 24 Back-Bench speeches in this debate, and I will seek to respond to as many as I can in the short time available. There are five main elements to our support in early years and childcare, and each one is a bigger offer than under Labour. First, there are 15 hours a week of free early education for disadvantaged two-year-olds. There was no such entitlement under Labour. Today’s regulations amend the eligibility criteria, introducing an equivalent earnings threshold of £15,400, which typically equates to somewhere between £24,000 and £32,000 in total household income. By 2023, we estimate that around 7,000 more children will benefit from the entitlement compared with the previous system.
Secondly, there is the universal 15 hours a week free childcare for three and four-year-olds—more hours than under Labour and now with the early years pupil premium, which was also not available under Labour. Thirdly, there are an additional 15 hours for working parents, and guess what? No such offer existed before 2010. Fourthly, up to 85% of childcare costs can be reimbursed through universal credit, which is a higher percentage than was ever available under tax credits. Finally, tax-free childcare will provide support for nearly 1 million more families than the existing vouchers scheme.

Emma Little Pengelly: Given the concerns raised across the House about the April closure of the childcare vouchers scheme, does the Secretary of State agree that the closure should be delayed to allow for those concerns to be addressed?

Damian Hinds: I have heard the concerns about the timing, and I can confirm that, following the hon. Lady’s representations, we will be able to keep the voucher scheme open to new entrants for a further six months.
Tax-free childcare will mean that more people become eligible, regardless of their employer and including the self-employed for the first time. The hon. Member for Ashton-under-Lyne (Angela Rayner) raised concerns about families having to pay childcare costs up front, but I reassure her that the flexible support fund is available to help in such cases.

Lucy Powell: Will the Secretary of State give way on that point?

Damian Hinds: I am short of time, so if the hon. Lady will forgive me, I will come back to her if there is time.
Turning to free school meals, we have extended the availability of free meals since 2010, going much further than Labour. The Conservative-led coalition extended free meals to disadvantaged students in further education institutions and introduced universal infant free school meals. We are investing £26 million in a breakfast club programme over the next three years, using the soft drinks industry levy.
When universal credit was introduced, we made clear our intention to set new criteria for free school meals, as my hon. Friend the Member for Fylde (Mark Menzies) rightly pointed out. We stated that intention in our response to the Social Security Advisory Committee report on passported benefits in March 2012. We repeated it in April 2013, when we introduced a temporary measure enabling all universal credit families to receive free school meals during the early phase of universal credit, and we have repeated it again several times since,  as my hon. Friend the Member for Croydon South (Chris Philp) mentioned. We are now, as we always planned, introducing new eligibility criteria to ensure that those entitlements continue to benefit those who need them the most.
Under our new regulations, we estimate that by 2022 around 50,000 more children will benefit from a free school meal compared with the previous system. The hon. Member for Washington and Sunderland West (Mrs Hodgson), who is shaking her head, asked about the methodology, as did the hon. Member for High Peak (Ruth George) and, I believe, the hon. Member for North West Durham (Laura Pidcock). We responded to the Social Security Advisory Committee on that exact point, and it put the information into the public domain.

Lucy Powell: Will the Secretary of State give way?

Damian Hinds: I cannot. No child who is receiving free meals now or who gained them during the roll-out of universal credit will lose their entitlement during the roll-out, even if family earnings rise above the threshold, as my hon. Friends the Members for Nuneaton (Mr Jones) and for Harborough (Neil O’Brien) mentioned. Once roll-out is complete, those children will be protected until the end of their phase of education—primary or secondary—as my hon. Friend the Member for Charnwood (Edward Argar) reminded us.
The protection arrangements will enable hundreds of thousands of children to continue to receive a meal during the roll-out, even if family earnings exceed the threshold. The £7,400 threshold relates to earned income, and it does not include additional incomings through universal credit. Depending on their exact circumstances, a typical family earning around our threshold would have a total annual household income of between £18,000 and £24,000.
The hon. Member for Manchester Central (Lucy Powell) said that the threshold was arbitrary. It is not arbitrary; the thresholds for these passported benefits are set at such a level as to hold the eligibility cohort steady, except that in the case of free school meals we took the decision to make it somewhat more generous than the previous system. The threshold is comparable, by the way, to that in the approach in Scotland, where there is a net earnings threshold equivalent of £7,320.
It is simply not true to say that we are introducing a cliff edge; there has always been one. The simple fact is that a child either gets a lunch or does not. A plate of food does not lend itself well to being tapered, as my hon. Friend the Member for South Cambridgeshire (Heidi Allen) has said. Some have suggested that we could convert the benefit into cash—that is true, of course—so that we could have a taper, but the whole point of free school meals is to guarantee that an individual child will receive a nutritious and healthy lunch.
Extending eligibility to all children in households on universal credit would result in around half of pupils becoming eligible. We estimate that that would cost in excess of £3 billion a year more by 2022. The additional meal costs alone, excepting the deprivation funding, would be in excess of £450 million a year—quite close to the figure mentioned by the hon. Member for Washington and Sunderland West. I reiterate that eligibility is going up, not down, as my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) said.
I am running short of time, so I will turn to the regulations on universal credit. My right hon. Friend the Secretary of State for Work and Pensions earlier outlined the changes in these regulations for UC. They include the removal of waiting days, which will put an average of £160 extra in people’s pockets and get them into the monthly routine sooner, and an additional two weeks of housing benefit to smooth the transition to universal credit. That one-off, additional, non-recoverable payment is worth an average of £233 to 2.3 million claimants over the roll-out period. Those measures form part of the £1.5 billion package of reforms that the Chancellor announced at the Budget. My hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) said that he was surprised to hear that Labour Members would be voting against those measures. I suggest that their constituents will be even more surprised.

Paul Masterton: Wil my right hon. Friend give way?

Damian Hinds: I hope my hon. Friend will forgive me if I do not; we are very short of time. As my hon. Friend the Member for Lewes (Maria Caulfield) reminded us in her unique style, the Government are committed to tackling injustices, removing barriers and widening opportunity. Because of the strong economic management that my right hon. Friend the Chancellor recapped for us earlier, we are able to continue our bold and ambitious programme of social reform extremely quickly.

Emma Little Pengelly: Can the Secretary of State confirm clearly for the House—this is very important—that the six-month delay in the closure of the childcare voucher scheme will be used to address concerns and issues that have been raised in the House today?

Damian Hinds: I already confirmed that we would have this period to reflect concerns and to allow the bed-in.
Our approach is working, including through advances in education, ensuring everyone can get the best start, unprecedented investment in childcare to support career choices and household budgets and universal credit, helping people into work, faster. In this generation, we have employment at record levels, household incomes at record levels and income inequality down. For the next generation, we have major improvements in the early years foundation stages, 1.9 million more children in good or outstanding schools and a 10% narrowing in attainment between the rich and poor. Today’s legislation continues this important work. I am proud of the enhanced support we are offering families through these programmes, and I commend the regulations to the House.
Question put.
The House divided:
Ayes 288, Noes 315.

Question accordingly negatived.
More than three hours having elapsed since the commencement of proceedings on the motions, the Deputy Speaker put the Questions necessary for the disposal of the business to be concluded at that time (Order, 8 March).

CHILDREN AND YOUNG PERSONS

Motion made, and Question put,
That an humble Address be presented to Her Majesty, praying that the Free School Lunches and Milk, and School and Early Years Finance (Amendments Relating to Universal Credit) (England) Regulations 2018 (S.I., 2018, No. 148), dated 6 February, a copy of which was laid before this House on 7 February, be annulled.—(Angela Rayner.)
The House proceeded to a Division.

Eleanor Laing: I remind the House that this motion is subject to double-majority voting: of the whole House and of Members representing constituencies in England.
The House divided:
Ayes 254, Noes 312.
Votes cast by Members for constituencies in England:Ayes 214, Noes 282.

The House having divided: Ayes 254, Noes 312.
Question accordingly negatived.

CHILDREN AND YOUNG PERSONS

Motion made, and Question put,
That an humble Address be presented to Her Majesty, praying that the Local Authority (Duty to Secure Early Years Provision Free of Charge) (Amendment) Regulations 2018 (S.I., 2018, No. 146), dated 6 February, a copy of which was laid before this House on 7 February, be annulled.—(Angela Rayner.)
The House proceeded to a Division.

Eleanor Laing: I remind the House that this motion is subject to double-majority voting: of the whole House and of Members representing constituencies in England.
The House divided:
Ayes 253, Noes 315.
Votes cast by Members for constituencies in England:Ayes 215, Noes 283.

The House having divided: Ayes 253, Noes 315.
Question accordingly negatived.

SOCIAL SECURITY

Motion made, and Question put,
That an humble Address be presented to Her Majesty, praying that the Social Security (Contributions) (Amendment) Regulations 2018 (S.I., 2018, No. 120), dated 31 January, a copy of which was laid before this House on 1 February, be annulled.—(Angela Rayner.)
The House divided:
Ayes 285, Noes 314.

Question accordingly negatived.

Angela Rayner: On a point of order, Mr Speaker. It is clear that the Secretary of State has survived the Division by promising not to press ahead with the Government’s plans to phase out childcare vouchers for another six months, along with other new childcare measures. May I ask your opinion, Mr Speaker, on any suggestion from the Government that there will be an oral statement explaining what will now happen during and after that period?

John Bercow: I am grateful to the hon. Lady for her attempted point of order, but I am afraid that her attempt to solicit my opinion will not be successful. I am not aware of any intention for a statement to be made, but the hon. Lady has aired her concern, and it is therefore on the record for all to see.

Tom Watson: On a point of order, Mr Speaker. Last week the Secretary of State for Digital, Culture, Media and Sport announced his intention to drop the Leveson inquiry despite new revelations from The Sunday Times whistleblower John Ford, including the obtaining of stolen data on the private information of Dr David Kelly a week before his death. The Secretary of State justified the decision by saying that
“the fact that this activity stopped in 2010 underlines the point that the world has changed. Practices such as these have been investigated. Newspapers today are in a very different position from when the alleged offences took place.”—[Official Report, 7 March 2018; Vol. 637, c. 326.]
I have just received new allegations that contradict that information. The blagger says that he knows individuals who are still engaged in these activities on behalf of newspapers. The Secretary of State has no evidential basis on which to make his rather complacent assertion.  Have you had notice of a statement from the Secretary of State, Mr Speaker, so that he can justify what evidence he has to say that blagging ended in national newspapers in 2010?

John Bercow: I have not received any such indication, I must advise the hon. Gentleman, but he has registered his concern and it will have been heard on the Treasury Bench.

Hemel Hempstead Urgent Care Centre

Motion made, and Question proposed, That this House do now adjourn.—(Mike Freer.)

Mike Penning: First, may I say what a privilege it is to have secured this Adjournment debate this evening, and how proud I am of my constituents who for so many years have been fighting the changes and particularly the cuts to healthcare in the Dacorum area where my constituency sits? In particular, I thank Edie and Ron Glatter and the Dacorum Hospital Action Group and its fantastic chair Betty Harris, who is very poorly; they have been fighting this campaign for many years. I also pay tribute to the fantastic work our local BBC radio station, BBC Three Counties, has done over the years, in particular that of the excellent journalist and reporter Justin Dealey; without his work, this debate would probably not have taken place.
For the national health service to carry on being the world-class service it is today, the public, our constituents, need to have faith not only in the fantastic doctors, nurses and porters and those who run the frontline services, but in the management of our hospitals and health provision. I am sorry to say, however, that the trust and feeling of commitment we need from our health service management in our part of the world are not just broken, but have completely failed.
I will not go into the history because tonight I want to talk about the urgent care centre, but the history of what has been happening to out-of-hours and urgent care, including A&E, in my constituency has been going on for many years. The previous Labour Administration decided to close the A&E and all acute services at the Hemel hospital after they had already been closed at the St Albans hospital, with all services moved into a Victorian hospital next to a football ground in Watford. We will not dwell on that tonight, however, but will come back to it on another evening.
As part of the sop to my community, we were given an urgent care centre—24/7, seven days a week, throughout the day and night—and next to it a walk-in GP centre. I was therefore surprised when Ms Fisher, chief executive of the West Hertfordshire Hospitals Trust, phoned me just before Christmas to say that, sadly, the urgent care centre would have to temporarily close on safety grounds at night. I was shocked by that, not least because the A&E in Watford struggles greatly, so the more people we can encourage to use other NHS facilities instead, the better. I said, “This is happening over Christmas which is one of the busy times,” and was told, “Don’t worry, Mr Penning, it’s only a temporary thing and we’ll have it open again just after Christmas.” They then put out a press release headed “Temporary overnight closure of Hemel Hempstead Urgent Care Centre”. Interestingly, that press release is still on their website today. I actually printed it off before I came into the Chamber this evening. As I go through my comments, Members will realise just how false that statement was.
One of my constituents then contacted Three Counties Radio, and Justin Dealey, its excellent reporter—
Motion lapsed (Standing Order No. 9(3)).
Motion made, and Question proposed, That this House do now adjourn.—(Mike Freer.)

Mike Penning: Thank you, Mr Speaker. I have even longer to pontificate, which is great news.
Justin Dealey acquired an interview with the said Ms Fisher, the chief executive of West Hertfordshire Hospitals NHS Trust. It was quite a long interview, in which Ms Fisher indicated:
“This is a short-term measure which is us acting in the interest of patient safety because, for the next few weeks over the festive period, we are unable to secure GP cover.”
I think most people would understand that, but not if they knew that the GPs were working in the room next door. But that is a separate issue. Justin went on to suggest that surely Ms Fisher understood that local constituents would have real concerns, and asked her whether she would be concerned if she lived in the area. She said:
“I completely understand their concerns, but what I want to reassure the residents of Hemel is that if there were to be any permanent change it would be our absolute intention to include people fully”
in that decision. She went on to say that
“legally we would be obliged to consult for a permanent change of that nature.”
That press release was issued not before Christmas this year but in December 2016. We have had no night provision at all in Hemel since then. Everybody has to go for urgent treatment to Watford A&E. Alternatively, they have to dial 111, which is an excellent service, but after they have been triaged they apparently get sent to Watford A&E. Watford has just come out of special measures, and I praise the work that has been done at the hospital but there is still a lot more to be done.

Jim Shannon: I thank the right hon. Gentleman for giving way. I sought his permission to intervene on him beforehand. He is outlining very well the issue with the Hemel Hempstead urgent care centre. Does he agree that, although there is immense staffing pressure, closing or scaling back on urgent care units and minor injury units only adds to the pressure on A&Es? There must be more investment in these mid-level centres if we are to prevent the A&Es from crumbling under the weight of the work they have to do.

Mike Penning: I clearly agree with my hon. Friend. It was kind of him to come and tell me that he wanted to intervene on me on behalf of other parts of the country that are facing similar pressures.
This was not about money. Normally, when our constituents come to talk to us, especially about the health service, it is about money. They tell us that they are really concerned that there is not enough money to provide the services, but on this occasion we were told that this was nothing to do with money. It was to do with the contractual problem with the GPs. We kept on asking what was going to happen, and then—completely out of the blue and still without consultation—we were told that the Government had said that there should be no more urgent care centres and that they should become urgent treatment centres instead. I was repeatedly told that it was the Government saying that this should be done. I asked whether the Government had said that the centre should not be open 24/7. I was told no, but that we had to move to being an urgent treatment centre. In the past couple of weeks, the unit has changed from being an urgent care centre to being an urgent treatment  centre. Interestingly enough, that means that paramedics and nurse practitioners are running the facility, and in many cases—without being rude to our GPs—they have more skills than a basic GP. I have to declare an interest, in that I was a military paramedic, so I am slightly biased about these things.
But was there a consultation before that decision was made, not just to close the UCC but to change to a UTC? No, there was not, even though it is a legal requirement to have one. We are now in a consultation, however. I could not believe it when I first heard this, but I have now heard from several constituents that in the actual meetings that took place—not when people were writing in—when different plans and options were being put to my constituents, a member of the clinical commissioning group staff was at the table trying to convince the public what sort of option they should go for. If we are going to consult the public, surely we should trust them and then have the confidence to listen to them.
What I find really fascinating about what is happening in my part of the world is that people from nowhere near my constituency—from the other side of Watford—are being consulted. They would never come to my facility in a million years—unless they just happen to be in the area—but they apparently have the same rights in this consultation as my constituents, who are again losing facilities hand over fist. Those other views are being taken into consideration because they happen to be part of the trust area. My constituents just scratch their heads and say, “This is illogical.” This facility, even though it is part of the NHS and anybody could come to it, is obviously being used by the largest town in Hertfordshire and the other towns and villages within Dacorum. However, I have no problem with the people of St Albans being consulted over this, because they are clearly part of the process.
Trust has been severely damaged. A highly paid chief executive of an NHS trust went on the radio—telling an MP is one thing, but going public is another—and tells listeners, “This is temporary. Please do not worry; it will all be okay. By the way, if I did actually change the service, that would be illegal because I have not consulted.” Frankly, when they then did not consult—the UCC is quite clearly never going to open again—that breaks the trust.
I have raised the accountability issue in the House before. It is absolutely right that my good friend the Minister on the Front Bench does not make decisions about what A&Es and UCCs are open and how many beds there should be. Those are quite clearly clinical decisions that should be based on knowledge and demand in the area—that is not what happened when our A&E was closed—but we seem to have moved from one extreme to another. I am told that if we want to challenge the consultation, the only way is to put the decision to judicial review based on the consultation. We tried that when the A&E was closed and we got a judicial review. The judge was generous and said, “You have a moral case, but you probably don’t have a clinical case. You don’t have a case in law, because the consultation was done.” However, if the consultation was a complete sham or did not take place at all, where do we go?
I have asked Ministers, I have tabled questions and I have been to see the Secretary of State. At the end of the day, who are these people accountable to? I know that  we can go to the health committees at the local council, but they do not have the powers to say that an individual or a trust has brought the NHS into disrepute, and yet that is what has happened here. Nobody was twisting the chief executive’s arm to go on the radio and say what she said. We all listened to it—I got a transcript the following morning—and I sat with Justin and said, “Well, that’s it, Justin. We’re okay.” I was not at all happy about the facility being closed over the 2016 Christmas period, but at least we knew that GPs were going to be recruited and that we were going to get there.
However, the exact opposite has happened. We are not getting the GPs back, and now the facility being open 24 hours a day is only one of the options. I know that the Minister’s notes will say how many people used to go to it at night and so on, but half the problem was that it was never properly promoted. There are access issues at the A&E because so many people are turning up and being triaged when a huge percentage of them do not need to be at an A&E but somewhere else within the NHS. I would argue that they should be at a UCC or UTC or that a GP should come out to them, but that is a separate issue because hardly any GPs make home visits in my constituency.
I know exactly how things work, because I was a Minister for a while and know about the advice that comes down from the trust and the clinical commissioning group, which will say things that are different from what I have said. However, I can honestly say that if there is one issue in my constituency that absolutely unites every political persuasion on my patch, it is the acute health provision in my constituency. We pushed a coffin on a hospital trolley all the way from Hemel Hempstead Hospital to Watford, to indicate that lives would be lost. We had debate after debate with the ambulance service, which said, “Don’t worry, we can get the ambulances there on time.” It probably could, if it rushed them through on a blue light in the middle of the night—if an ambulance was available. Because of the previous Administration’s botching of the regionalisation of the ambulance service, there are often not that many ambulances available, even though the ambulance depot is on my patch.
People do not want to clog up A&E; they want to have the confidence that there is somewhere safe that they and their kids can go for treatment. We have no idea what the conclusion of this retrospective consultation will be. We have no faith that even if the conclusions are in agreement with what we want, we will actually get it. Not all my constituents agree with me, but in a treatment centre I would rather have a highly qualified paramedic nurse practitioner than—I have to choose my words carefully here—an ordinary GP, simply because the paramedic nurse practitioner has so much experience in that area. That is where the modernisation of the health service has been so brilliant. But after telling me that the decision was not about money, it is, frankly, disgusting to sit people down at consultation meetings and try to convince them that it would be better if the centre was not open 24 hours a day.
I hope that the Minister understands how passionate we are about the matter. My constituency is 17 minutes from London and it shares a boundary with yours, Mr Speaker. People in the top part of my constituency all go to Luton and Dunstable—quite rightly so; it is an  excellent facility—and those in the bottom part of my constituency, or anyone who comes off the M1 and the M25, end up going to Watford for their acute care.
I want Watford General Hospital to succeed. I think the location of the site is completely ludicrous, and we need a new general hospital for the growing population in our part of the world. I know that you have pressures on housing, Mr Speaker, as we have. But I want the houses, because I want people to have somewhere to live—so many families are struggling at the moment—and if we are to build those houses, we need facilities, such as schools and everything else. When my constituents go to bed at night, they need to know that the urgent care centre is open in case something happens; and that if they cannot cope, we can blue-light them to Watford or to Luton and Dunstable.
I have tried for weeks and weeks to get this Adjournment debate. My hon. Friend the Minister is lucky, because I had been asking for a 60-minute debate in Westminster Hall. We may yet end up there, but that will depend a lot on what he says from the Dispatch Box.

Stephen Barclay: I will do my best to address the issues raised by my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) in order to pre-empt the further debate to which he alludes. I congratulate him on securing this debate. I commend him for his continuing and passionate campaign on behalf of his constituents, and for his expertise on health issues, which he has brought once again to the House.
I reiterate the fundamental principle for all service change in the NHS: it should be based on clear evidence that it will deliver better outcomes for patients. That is the framework that is applied. I understand that my right hon. Friend is concerned about the changes proposed in his constituency. He will appreciate, not least as a former Minister, that I cannot say anything that would prejudice the outcome of the ongoing consultation, but he has spoken powerfully about his concerns in the House tonight.
I am sure that my right hon. Friend agrees that any decision should be driven by what is best for the constituency clinically, by what is best for the health service in the area, and by what is of most benefit to the greatest number of people in the area. I shall briefly set out some of the background, as I understand it, to the issues that inform the consultation. As he mentioned, in December 2016, the urgent care centre was temporarily closed overnight because of concerns about patient safety as a result of problems with staffing the GP overnight shifts. The CCG’s advice was that the urgent need to address patient safety issues did not allow time for consultation about that temporary change. I appreciate the concern that he raised about the manner in which that decision was taken.
The local NHS has worked hard to manage the consequences of the decision. I understand from the CCG that the volume of overnight patients at the centre was relatively low, and that the impact that has been felt at Watford General Hospital, notwithstanding the other challenges it faces, has been of the order of one or two patients per night, usually those with relatively minor injuries. As my right hon. Friend will be aware, emergency cases have been sent to Watford since the closure of  Hemel Hempstead’s A&E in 2009—he referred to the protest involving a coffin about that decision, which was taken under the previous Labour Government. On provision in the early hours of the morning, he will also be aware that journey times then will be shorter than they would be at the times when the urgent care centres are open.

Mike Penning: Let me go back a fraction. If the decision has to be based on clinical advice—I understand the principle—what is the point of consulting the public, who are not clinically trained? We have to consult them, because that is what the law says, so is the law wrong for saying we should consult people who are not clinically trained? If the decision has already been made, what is the point?

Stephen Barclay: The public consultation is to inform the discussion with clinicians. If such a decision was taken by Ministers—my right hon. Friend alluded to this in his remarks—it would likewise be informed by public consultation. That is part of running a transparent and open process.
The CCG is now consulting the public on future opening hours, following a broader urgent care strategy review. The consultation seeks views on three options: retaining the current temporary hours; increasing the temporary hours by two hours at the end of the day; or re-opening on a 24-hour basis. As it runs until 28 March, I know that my right hon Friend and his constituents will wish to share their views as part of the process.
I do understand the criticism made by my right hon. Friend’s constituents that the overnight closure has been dragging on for too long and that a final decision needs to be made as soon as possible. The views gathered during the current consultation will inform the CCG’s decisions about the future opening hours for Hemel Hempstead UTC, as well as about the contract for West Herts medical centre. I further understand that the CCG has commissioned an independent research company to review and analyse all the comments received, and the feedback will be compiled into a summary report. That will be presented to the Herts Valleys CCG board meeting, in public, on 26 April, when a decision on both issues will be made.
Turning to the issue of the treatment centre’s status, on 1 December 2017, Hemel Hempstead UCC changed to a UTC, as part of national measures introduced by NHS England. I understand from the CCG that this was a change of name, not of service. The CCG therefore did not carry out a further consultation on the establishment of the UTC as it did not feel that that represented a significant change in service. I understand that no services have been withdrawn from the UTC, but there have been a number of enhancements, including: the introduction of a number of bookable appointments through NHS 111; the addition of near patient testing for some conditions, reducing waiting times and reducing the need for patients to attend Watford General Hospital for some tests; and an improved IT system, meaning that medical staff will be able to access patients’ records if they give consent. The CCG also expects services to expand to include other professionals, such as pharmacists, emergency care practitioners, those providing access to mental health services and community nursing staff.
That also dovetails with some important changes in planned care locally. I understand from the CCG that improvements in the treatment of musculoskeletal disease mean that the single point of access triage at Hemel can direct people on to community physio, where that meets their needs. That is good for the individual patient and also ensures that capacity in the acute settings is able to concentrate on those with more complex needs.

Mike Penning: The Minister has just told the House that there has been a complete change in how physiotherapy is provided—it was provided at the hospital and is now provided elsewhere. There was no consultation on that, although I understand that there was a requirement to do so, because this involved a complete change of service in respect of where people go and so on. The point I am trying to make is: when there is no consultation, what do we do? Do we just sit back and say, “Okay”? Some kind of measure has to be taken when consultation continually gets ignored or does not happen at all.

Stephen Barclay: The distinction that was being drawn was in respect of services that have been removed, on which my right hon. Friend is right that there is a legal requirement for a consultation. He has expressed to the House his concerns about the process by which that temporary decision on patient safety was taken. The point I was making was that the services that have been brought to the area are bringing a benefit to the local community. I would have thought that they would be welcomed. Indeed, from April, many patients with diabetes in the area will no longer need to travel to Watford to be seen by a consultant, because the consultants will be coming to them by working in the community. Again, that is good for patients and for the system as a whole. It is part of the way in which these systems evolve: some services come closer to the community, while others, as under the decision taken by the Labour Government in 2009, are rationalised into Watford A&E.
I understand my right hon. Friend’s frustration that in his view the local CCG seems out of touch with popular opinion. Given the way in which he champions the community that he represents, I know that he is not out of touch with popular opinion—he always speaks in a well-informed way about his constituents’ needs, and I would expect that to be represented in the consultation responses that the CCG receives. The CCG is accountable to NHS England for fulfilling its functions. It is also a member of the health and wellbeing board, at which local authorities and other partners can challenge how it has been fulfilling its functions. The CCG’s activities are subject to scrutiny by local authorities and to supervision by NHS England. If NHS England believes that the CCG is failing to discharge its functions, it has the power to intervene and issue directions, or to replace the accountable officer.
It is worth reiterating that all proposed service changes should meet the four tests for service change. They should have support from GP commissioners; be based on clinical evidence; demonstrate public and patient engagement; and consider patient choice. It is right that such matters are addressed locally, where local healthcare needs are best understood, rather than in Whitehall. I think my right hon. Friend recognised the point about Ministers not making clinical-led decisions. For those reasons, I am sure that he will appreciate that I am not  able to offer the House an opinion on the merits of the proposals, but of course we recognise that changes to health services inspire passionate debate, as they should, from all quarters, as we have seen this evening.
There is no standard approach on what an urgent care centre should offer. The offer varies between different urgent care centres, depending on the services required locally. Urgent care centres can treat a range of injuries, including sprains, strains and broken bones.

Mike Penning: I want to help the Minister. The urgent care centre is gone. We do not have an urgent care centre; it is now an urgent treatment centre. This is something that confuses my constituents as well. I was trying to make two points. First, it is not just about the clinical commissioning group on its own. The decision to close over Christmas in 2016 was made by West Hertfordshire Hospitals NHS Trust, and it cannot escape blame, because it was the trust’s chief executive who made that decision and went on and acted. Secondly, it is also about the lack of knowledge and understanding of the community. We have had a churn of people coming through and running the services. They seem to come and go and come and go, never understanding or empathising with the constituency.

Stephen Barclay: Before my right hon. Friend’s intervention, I was just coming to the urgent treatment centre, because there is obviously a distinction. Urgent treatment centres are about standardising the range of options and simplifying the system so that patients know where to go and have clarity about which services are on offer. My right hon. Friend made the point about how we direct footfall and constituents into services at the right point to reduce the demand on the A&E at Watford by simplifying what the UTC does, what it offers and how that is understood by constituents.
Patients and the public will be able to access urgent treatment centres that are open for 12 hours a day, and that are GP-led and staffed by a range of clinicians with access to simple diagnostics. They will have a consistent route to access urgent appointments offered within four hours and booked through NHS 111, ambulance services and general practice. A walk-in access option will also be retained. They will increasingly be able to access routine and same-day appointments, and out-of-hours  general practice for both urgent and routine appointments at the same facility where geographically appropriate. UTCs are also part of a locally integrated urgent and emergency care service working in conjunction with the ambulance service, NHS 111, local GPs, hospital A&E services and other local providers.
In conclusion, these are important issues, and decisions should not be taken lightly. The location of services is a difficult and often controversial issue, and my right hon. Friend is to be commended for his campaign and the points that he has made on behalf of his constituents.

Mike Penning: It is not often that we get more time to speak in this place, so while I have the Minister at the Dispatch Box, can he answer this very simple question: what recourse is there for me, as the MP, and for my constituents when we are misled—I know that I have privilege, but I am using the word “misled”—by a senior NHS management team about what is going to happen to the urgent care service? I am talking about when what the team says turns out to be completely untrue. What recourse is there so that we can start to rebuild some trust in my constituency?

Stephen Barclay: As my right hon. Friend knows, it would be inappropriate for a Minister to comment on a specific allegation such as that from the Dispatch Box. I cannot comment on this specific consultation, which is under way as we speak. The point that has come out of this debate is that the decision of December 2016 was taken on patient safety grounds, owing to a difficulty in recruiting GPs at that time. A consultation is now under way, and it is for my right hon. Friend’s constituents to make their case as part of that consultation.
The people affected by these changes need to be involved in the decision; that is what the consultation will seek to achieve. Our starting point for discussing service change is that there will be no changes to the services that people currently receive without proper public consultation. I therefore urge my right hon. Friend and his constituents to make their voices heard as part of that consultation in the usual way.
Question put and agreed to.
House adjourned.